Outback Sporting Goods purchases merchandise on terms of 4/10, n/60. The company has a line of credit that enables it to borrow money as needed from Northern Bank at an annual interest rate of 13 percent. Should Outback pay its suppliers within 10-day discount period if it must draw on its line of credit (borrow from Northern Bank) to make these early payments? Explain?
- Describe the operating cycle of a merchandising company.
- Compare and contrast the merchandising activities of a wholesaler and a retailer.