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REQUIRED Should Mermaid Stores use its overdraft facility to settle the debt within 12 days?...

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Finance

REQUIRED

Should Mermaid Stores use its overdraft facility to settle the debt within 12 days? Motivate your answer with the relevant calculations.

INFORMATION

Westbrook Wholesalers granted credit terms of 60 days to Mermaid Stores but is prepared to allow a 3.5% rebate if Mermaid Stores pays the account within 12 days. Interest on overdraft is charged at a rate of 20% per annum.

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