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