Borrowing money from a bank
Silva Corp. purchases $1,000,000 worth of materials each month on credit terms of 3/5, n /45. Silva always pays on day 45, never taking the discount. Silva does this because they do not collect from customers until the end of the month. Silva could borrow money from a bank at a rate of 15%. Explain through computations why it might be better for Silva to borrow the money from the bank.