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Experiencing a temporary shortage of funds

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Question: The Nufit Shoe Company is experiencing a temporary shortage of funds. The treasurer has suggested two ways in which funds could be raised. First, the company could forego the cash discounts it has been taking and pay its invoices at the end of the credit period. The firm's suppliers offer terms of 2/20, net 45. Second, the company could borrow funds from the local bank at an interest rate of I 0 percent (before tax). Which alternative should be chosen?

Reference no: EM131750521

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