Monument Health buys $400,000 of a particular item (at gross prices) from its major supplier, Cardinal Health, which offers Monument terms of 1/5, net 15. Currently, the hospital is paying the supplier the full amount due on Day 15, but it is considering taking the discount, paying on Day 5 and replacing the trade credit with a bank loan that has a 12 percent rate. Assume 360 days per year.

What is the amount of free trade credit that the organization obtains from Cardinal Health? Format is $xx,xxx.xx

What is the total amount of trade credit offered by Cardinal? Format is $xx,xxx.xx

What is the approximate annual cost of the costly trade credit? Format is xx.xx%

Should the organization replace a portion of the trade credit with the bank loan? Format is Yes or No

If the bank loan is used, how much of the trade credit should be replaced? Format is $xx,xxx.xx