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On July 1, Donkey purchased $45,000 of inventory, terms 5/10, n/30. Donkey paid freight costs of $3,200. On July 3, Donkey returned damaged goods and

On July 1, Donkey purchased $45,000 of inventory, terms 5/10, n/30. Donkey paid freight

costs of $3,200. On July 3, Donkey returned damaged goods and received $6,000 back. On

July 9, Donkey paid 60% for the goods and the rest was paid on September 5. 1% Penalty

charge on outstanding amount was applied for making late payment. What is the net

benefit Donkey has availed? If Donkey gets an offer of 4% return on $45,000 from another

investment, should they accept the offer or should they purchase the inventory at 5/10,

n/30 terms?

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