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Cash Discount vs Annual Interest at the Bank

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Lets say company A is analyzing the following:

It costs them 25.5% if they give up a cash discount that is being offered by a supplier.

The local bank offers them an annual interest of 14%.

What should they do? Take the discount? or Take the local bank's loan of 14%?

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Solution Summary

The solution decides whether to take cash discount or invest the said amount at the bank.

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The company should avail the discount and if it does not have money to pay borrow the money@ 14% from the bank to ...

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