PDA

View Full Version : Cost of Failing to Take Cash Discount


kim4kids
Oct 15, 2011, 05:14 PM
Assume the proceeds from the loan with the compensating balance requirement will be used to take cash discounts. Disregard part b about installment payments. And us the loan costs from part a. If the terms of the cash discount are 2/10, net 60, should the firm borrow the funds to take the discount?