Reliance is an established computer store in Melbourne City. Last few months Reliance is struggling with its sales figure and trying hard to increase its sales. It also had some financial difficulties to repay its debts last year. The reliance sales manager is very keen to improve its sales and planning to buy some computer equipment to keep the sales line moving. As they have some financial difficulties, Reliance is planning to buy computer equipment on credit.

They need AU $100,000 for buying computer equipment and they are considering the following three options:

• Trade credit 5/30 or 0/60 days
• Bank overdraft for the purchase amount @ 16 percent per annum for the maximum period of 90 days.
• Bank Accepted Bill for 90 days, yields @12 per annum, Fees 1.5 percent of the face value of the bill.

Required:

1. Please provide your expert advice, which particular options or a mix of options should consider
2. Please justify your answer and show relevant calculations