Assume that a supplier offered JC Penny merchandise totaling $50 million with the following trade...
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Accounting
Assume that a supplier offered JC Penny merchandise totaling $50 million with the following trade credit terms: 2/10, n/90.
JC Penny also has an available line of credit, carrying an interest rate of 7%.
When should JC Penny make the payment to the supplier?
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a) Day 1 (when receiving the merchandize get rid of the liability!)
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b) On the 10th day
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c) Day 45 (a good place in the middle)
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d) Day 90
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e) Any day between day 1 and 90 would be just fine.
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