Question

Many creditors of your firm offer early payment discounts. The accounts payable supervisor does not believe in paying early “as the bank overdraft rate of j12 = 8% pa is more than the average 2% offered for payment within 10 days from date of invoice”. The supervisor stretches the accounts to 40 days from the last date of early payment discount. If average creditors terms are 2%, 10: net 30, what is the minimum number of days beyond the net date that accounts must be stretched to make stretching a viable alternative?

Answer 1

Well done