Problemboles coporation needs to raise 500000 for one year, Ask an Expert

Accounting

Problem:

Boles coporation needs to raise $500000 for one year to supply capital to new store. Boles buys 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$500000 in the ofrm of costly trade. alternatively Boles could borrow form its bank on a 12% discount interest basis.

Required:

Question: What is the EAR if the lower cost source?

Note: Please answer in proper manner and show all computations

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91170623

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