Use the following information to answer Questions 20 - 22.

Bulldog Inc. recently made a $5,500 purchase from a vendor. The vendor will accept payment by check or ACH. In either case, the vendor offers net trade credit terms of 45 days. The assistant treasurer of Bulldog Inc. notes that payment by check will provide an additional 3 days of float (beyond the 45 days of trade credit), relative to payment by ACH (assume an additional one day of float beyond the trade credit period). It costs $1 to process a check and costs $0.50 to process an ACH payment. In an effort to encourage Bulldog Inc. to pay via ACH, the vendor has offered a 0.25% discount for ACH payments.

20. Assuming the firm's opportunity cost of funds of 9%, what is the present value of an ACH disbursement?

	a.	$5,436.67
	b.	$5,425.22
	c.	$5,424.72
	d.	$5,435.67

21. Assuming the firm's opportunity cost of funds of 9%, what is the present value of a check disbursement?

	a.	$5,436.67
	b.	$5,425.22
	c.	$5,424.72
	d.	$5,435.67

22. Assuming the firm's opportunity cost of funds of 9%, at what discount would Bulldog Inc. be indifferent between the two disbursement methods?

	a.	0.0395%
	b.	0.0271%
	c.	0.0487%
	d.	0.01580%