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1) A firm received an invoice of $800, 000 from a supplier with the terms 2/5, Net 40. It will receive 2% discount if paying

1) A firm received an invoice of $800, 000 from a supplier with the terms 2/5, Net 40. It will receive 2% discount if paying by the 5th day, or pay the full amount by the 40th. Day. The firms cost of capital is 8%. Using the PV of Trade terms, evaluate the decision.

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