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Your firm just purchased $100,000 in goods from your supplier on trade credit terms of 2/10 net 45. Your opportunity cost of funds is 10%.

Your firm just purchased $100,000 in goods from your supplier on trade credit terms of 2/10 net 45. Your opportunity cost of funds is 10%. What is the present value savings that would be earned if your firm makes the payment on the last day of the discount trade credit period versus the last day of the net trade credit period?

a.

$1,049.90

b.

$1,389.29

c.

$841.84

d.

$1,506.76

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