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Simple Simon's Bakery purchases supplies on terms of 1 4/10, net 26. Simple Simon's chooses to take the discount offered, it must obtain a bank
Simple Simon's Bakery purchases supplies on terms of 1 4/10, net 26. Simple Simon's chooses to take the discount offered, it must obtain a bank loan to meet its short-term financing needs. A local bank has quoted Simple Simon's owner an interest rate of 11.1% on borrowed funds. Should Simple Simon's enter the loan agreement with the bank and begin taking the discount? (Use 365 days for a year) Simple Simon's can earn an effective rate of % (Round to one decimal place.) Should Simple Simon's enter the loan agreement with the bank and begin taking the discount? (Select the best choice below.) O A Simple Simon's will earn 37 9% on its purchases by paying within the discount period and should enter into the loan agreement OB. Simple Simon's will earn 21.9% on its purchases by paying within the discount period and should enter into the loan agreement O C. The discount rate of 14% is considerably lower than the 11.1% interest rate, so Simple Simon's should not enter into the loan agreement OD. Need more information to answer the
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