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Bonanza is offered credit terms of 2/10 net 45 by the majority of its suppliers. Bonanza also has a credit line available at a major
Bonanza is offered credit terms of 2/10 net 45 by the majority of its suppliers. Bonanza also has a credit line available at a major bank at an interest rate of 12 percent. What is the cost of giving up the cash discount? Should the company take the cash discount or finance the purchase with the line of credit?
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Corporate Finance Core Principles and Applications
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
5th edition
1259289907, 978-1259289903
