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The Reynolds Corporation buys from its suppliers on terms of 2 / 1 5 , net 5 5 . Reynolds has not been utilizing the
The Reynolds Corporation buys from its suppliers on terms of net Reynolds has not been utilizing the discounts offered and has been taking days to pay its bills. Ms Duke, Reynolds Corporation's vice president, has suggested that the company begin to take the discounts offered. Duke proposes that the company borrow from its bank at a stated rate of percent. The bank requires a percent compensating balance on these loans. Current account balances would not be available to meet any of this compensating balance requirement.
The Reynolds Corporation buys from its suppliers on terms of net Reynolds has not been utilizing the discounts offered and has been taking days to pay its bills.
Ms Duke, Reynolds Corporation's vice president, has suggested that the company begin to take the discounts offered. Duke proposes that the company borrow from its bank at a stated rate of percent. The bank requires a percent compensating balance on these loans. Current account balances would not be available to meet any of this compensating balance requirement.
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