Q50036 Z Ltd. importing goods worth USD 2 million,

Z Ltd. importing goods worth USD 2 million, requires 90 days to make the payment. The overseas supplier has offered a 60 days interest free credit period and for additional credit for 30 days an interest of 8% per annum.

The bankers of Z Ltd offer a 30 days loan at 10% per annum and their quote for foreign exchange is as follows:

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Solution

  1. Pay the supplier in 60 days

If the payment is made to supplier in 60 days the applicable

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