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Company A is currently cash-constrained, and must make a decision about whether to delay paying...

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Finance

Company A is currently cash-constrained, and must make a decision about whether to delay paying one of its suppliers, or taking out a loan. They owe the supplier $12295, but the supplier will give them a 3.47% discount if they pay in the "rst 10 days (when the discount period expires). That is, they can either take the discount by paying in the "rst 10 days, or $12295 in 2 month(s) when the net invoice is due.

What would be the cost for the "rm if they forgo the discount on its trade credit agreement, wait and pay the full $12295 in 2 month(s)?

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