Question

ABC purchases $356,000 worth of goods from its supplier each year on terms of 1/10, net 20 and currently does not take the discount. If ABC decided to raise enough capital to pay down accounts payable enough to take the discount, how much would they need to raise?

Answer 1

Amount to raise =Amount to pay (1-Discount)

                          = 356000 (1- .01)

                          = 356000 * .99

                           = 352440