Waec Model Questions Vol1 2021 Commerce Question 8
Practice objective / multiple choice question 8 from the 2021 Waec Model Questions Vol1 Commerce examination.
A small business needs ₦200,000 to purchase inventory. It can obtain finance either (i) a bank loan with 12% per annum interest payable monthly and a processing fee of ₦5,000, or (ii) merchant credit that offers a 10% discount on purchases if paid within 30 days, otherwise 18% per annum simple interest on the outstanding amount with no fee. The business expects to sell the inventory and receive cash after 45 days. Which source of finance results in the lower total cost, and what is that total cost?
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About This Question
This is Waec Model Questions Vol1 2021 Commerce Question 8. It is one of the objective questions from the 2021 Waec Model Questions Vol1 Commerce examination.
Difficulty level: Medium .
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