Multiple Choice
Which of the following strategies should a cash-strapped firm adopt if the effective interest rate charged on trade credit is lower than the bank's interest rate?
A) Take the discount but pay after the discount period.
B) Borrow from the bank and take the discount.
C) Ignore the discount, pay at the end of the period.
D) Take the discount and hope for longer payment float.
Correct Answer:
Verified
Correct Answer:
Verified
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