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Your firm is short of cash but can borrow from its credit line at an annualized cost of 5%. Further, your firm has just been
Your firm is short of cash but can borrow from its credit line at an annualized cost of 5%. Further, your firm has just been offered trade credit terms of 2/10 net 30 for purchases made from a supplier. How and when should you repay the trade credit obligation?
a. | on Day 10 with funds from the short-term investment holdings | |
b. | on Day 10 with funds borrowed from the credit line | |
c. | on receipt with funds borrowed from the credit line | |
d. | on Day 30 with funds borrowed from the credit line |
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