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Capital Decision Problem II Divo Limited is buying regularly from Apo Hiking, a supplier, who gives a 2/10,n/30 discount. Its total purchases from Apo Hiking
Capital Decision Problem II Divo Limited is buying regularly from Apo Hiking, a supplier, who gives a 2/10,n/30 discount. Its total purchases from Apo Hiking is Php100,000,000 per year. However, II Divo doesn't have enough cash to finance forward expenses for the next 20 days if it will take advantage of the discount. Suppose II Divo can borrow at 7% per year, will you advise II Divo borrow money to take advantage of the discount? If so, what type of financing will you recommend that II Divo use
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