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An Indian importer has a payable of 100,000. The seller has given the Indian importer the following two options. i. Pay immediately with a cash

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An Indian importer has a payable of 100,000. The seller has given the Indian importer the following two options. i. Pay immediately with a cash discount of 1% on the payable. ii. Pay after. 3 months with interest at 4% P.a. The borrowing rate for the importer in Rupees is 12% P.a. The following are the exchange rates as on December 02,2002. Rs/ Spot 74.76/80 3 month 38/40 Which of the above two options is advisable for the importer

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