Question
Hi i need help with this question. A firm has found itself having cash flow problems.It pays its suppliers on terms of 2 / 15
Hi i need help with this question.
A firm has found itself having cash flow problems.It pays its suppliers on terms of 2/15 net 50.In the past, it has always taken the cash discount.However, it finds itself in a situation where it cannot come up with the cash needed to pay within 15 days for purchases.In 50 days, it will have the necessary cash.If it chooses to borrow money to pay for purchases it would be forced to go to a finance company specializing in high-risk loans.It would be forced to pay a rate of 24 percent compounded monthly on the loan.What should the firm do?
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