Charged on trade credit is lower than bank interest rate

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Reference no: EM131189847

Which one of the following strategies would continue to be effective if a cash-strapped firm determines that the effective interest rate charged on trade credit is lower than the bank's interest rate?

a. take the discount but pay after the discount period

b. borrow form the bank and take the discount

c. ignore the discount, pay at the end of the period

d. take the discount and hope for longer payment float

Reference no: EM131189847

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