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Your firm receives two proposals from different suppliers with the following credit terms: Arrow Supplier: 3/10 net 45. Bow Supplier: 1/10 net 20. Your alternative
Your firm receives two proposals from different suppliers with the following credit terms: Arrow Supplier: 3/10 net 45. Bow Supplier: 1/10 net 20. Your alternative short-term financing cost is 40%. Which supplier should you select? And should you take or forgo their credit terms discount?
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