Chapter 18 – Working capital management – Accounts Payable

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October 28, 2020 at 9:45 am #593351
sarasiw
Participant
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Hi Chris,

Don’t we have to accept the discount of 24.7% because if we don’t it’s costing us more (24.7%) than the overdraft interest of 13%?
In other words accepting the discount we can save more than what we pay for overdraft interest.

Could you please explain this? Thank you
October 30, 2020 at 8:51 pm #593579
P2-D2
Keymaster
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Hi,

Would we not go with the cheapest option?

Thanks

Chris
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