Question
Little Kimi Clothiers can borrow from its bank at 21 percent to take a cash discount. The terms of the cash discount are 3/16 net
Little Kimi Clothiers can borrow from its bank at 21 percent to take a cash discount. The terms of the cash discount are 3/16 net 60.
a. Compute the cost of not taking the cash discount. (Use 365 days in a year. Do not round the intermediate calculations. Round the final answer to 2 decimal places.)
Cost of not taking a cash discount %
b. Should the firm borrow the funds?
-
Yes
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Financial Markets and Institutions
Authors: Jeff Madura
12th edition
9781337515535, 1337099740, 1337515531, 978-1337099745
