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How much would the company save annually

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Question - A Company purchases $3 million of raw materials each year on terms of net 30. Currently the purchasing agent is paying each invoice in 25 days. If payment is delayed until the 30th day, how much would the company save annually, assuming an 11 % cost of funds and basing calculations on a 365 day year?

a) None of the other answers is correct

b) Between $8,000 and $8,500

c) Under $3,500

d) Between $4,250 and $4,750

e) Between $27,250 and $27,750

Reference no: EM132992437

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