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Malingumu, a kiosk owner, buys all his merchandise from Halimoja Wholesalers. Due to the long standing relationship Halimoja offers Malingumu 30 days credit which has
Malingumu, a kiosk owner, buys all his merchandise from Halimoja
Wholesalers. Due to the long standing relationship Halimoja offers Malingumu 30 days credit which has recently been reviewed to 2/10 net-30. Normally, Malingumu has been settling his accounts in 35 days without a penalty. Malingumu has an average credit history and believes that a short-term line of credit from a bank will attract interest in the 23% -26% per annum region. He is therefore resigned to take up the cash discount. Is he making the right choice?
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