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A company currently takes 45 days credit from suppliers on the basis that this is 'free' finance.Annual purchase are k20million and the company pays over

A company currently takes 45 days credit from suppliers on the basis that this is 'free' finance.Annual purchase are k20million and the company pays over draft interest of 15%.Payment within 15 days woukd attract 2.5% quick settlement discount.

Required: Advice whether the company pay sooner in order to take advantages of the discount of not

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