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To finance additional inventory, Arbutus Ltd. is considering forgoing the cash discount on all of its purchases currently offered on terms of 2/10, net 45.

To finance additional inventory, Arbutus Ltd. is considering forgoing the cash discount on all of its purchases currently offered on terms of 2/10, net 45. No payments will be stretched. Annual purchases are $9.21 million.

a.Calculate the additional financing available to Arbutus Ltd. by forgoing the cash discount.

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