Should simple simons enter the loan agreement

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Reference no: EM131985066

Simple Simon's Bakery purchases supplies on terms of 1.9/10, net 30. If Simple Simon's chooses to take the discount offered, it must obtain a bank loan to meet its short-term financing needs. A local bank has quoted Simple Simon's owner an interest rate of 10.4 %on borrowed funds.

Should Simple Simon's enter the loan agreement with the bank and begin taking the discount? (Hint: Use a 365-day year.)

Reference no: EM131985066

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