What plan should the firm implement

Reference no: EM13303189

Gonzales Company currently uses maximum trade credit by not taking discounts on its purchases. The standard industry credit terms offered by all its suppliers are 1/10, net 30 days, and the firm pays on time. The new CFO is considering borrowing from its bank, using short term notes-payable, and then taking discounts. Its net purchases are 11760 per day, using a 365 day year. The interest rate on the notes payable is 12% on a discount interest basis with a 30% compensating balance. What plan should the firm implement?

Reference no: EM13303189

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