Elegant Gown retailing company ABC Canada Inc. buys $125,000 of merchandise from their South American supplier. The company decided to return $18,500 worth of Inventory due to manufacturing defect they spotted on the shipment. Upon receipt of the invoice along with the shipment, ABC Canada Inc. has the option of paying within 10 days with a 3% discount on the invoice price of the shipped merchandise.

Explain which one of these statements is true and why? Include resolution.

A. If the company pays within 10 days of the receipt of the shipped merchandise, they will get a discount, and will pay the total amount of the bill, minus the discount amount. The total payment would be $121,250.

B. If the company pays 15 days after the receipt of the shipped merchandise, they will not get a discount, and will pay the total amount of the bill, minus the cost of the returned merchandise. As such, the total payment would be $106,500.

C. If the company pays 11 days after the receipt of the shipped merchandise, they will not get a discount, and will pay the total amount of the bill which would be $125,000.

D. If the company pays within 10 days of the receipt of the shipped merchandise, they will not get a discount, and will pay the total amount of the bill, minus the cost of the returned merchandise