Assume that Guizhou Falls Department Store orders inventory and is offered a cash discount by one of their suppliers with the condition 2/10, net 40. In order for Guizhou Falls to take the cash discount, the company will need temporary financing of $75,000 for 30 days. The local bank offers a loan for 12% per annum (i.e. annual interest). Assume 365 days in the year.

Answer the following questions by entering plain numbers (no currencies, commas or %-signs. don't round during calculations, only round the final amount)

Blank #1: What is the cost of foregoing the cash discount? (don't enter %-sign, round to 2 decimals)

Blank #2: If Guizhou Falls decides to take the bank loan, how much will they have to pay in interest? (don't enter $-sign; round to full $-amount)

Blank #3: What amount would Guizhou Falls need to borrow, if there was a required 8% compensating balance? (don't enter $-sign; round to full $-amount)

Blank #4: What would be the interest rate if the interest charge for the offered loan was $937 and if there was a required 8% compensating balance on the loan? (don't enter %-sign; round to 2 decimals)

Blank #5: Should Guizhou Falls borrow the required amount and realize the cash discount under the conditions in (#2)? Only enter either Yes or No.

Blank #6: Should Guizhou Falls borrow the required amount and realize the cash discount under conditions in (#4)? Only enter either Yes or No.

Question 27 options: Blank # 1 Blank # 2 Blank # 3 Blank # 4 Blank # 5 Blank # 6