Boles buys from its suppliers on terms of 310 net 90 and it, Ask an Expert

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Boles Corporation needs to raise $500,000 for one year to supply capital to a new store. Boles buys from its suppliers on terms of 3/10, net 90, and it currently pays on Day 10 and takes discounts, but it could forgo discounts, pay on Day 90, and get the needed $500,000 in the form of costly trade credit. Alternatively, Boles could borrow from its bank on 12 percent discount interest basis. What is the EAR of the lower cost source?

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Category:- Basic Finance
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