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Candy Cane Ltds Accounts payables amounts to $40,000 and they have just renegotiated their credit...

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Finance

Candy Cane Ltds Accounts payables amounts to $40,000 and they have just renegotiated their credit terms with the supplier. The credit terms being offered are 3/10 net 60. The company however does not have sufficient cash on hand to take advantage of the discount and are trying to borrow the funds. Candy Cane can borrow the funds from one of two banks. Scotia Bank will loan the funds for 20 days at a cost of $400 while TD Bank offers a discounted loan for 20 days at a cost of $320.

Required: Advise Candy Cane Ltd. on what action they should take. (Use 4 decimal places and show all calculations) (12 marks)

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