CyberAge Outlet, a relatively new store, is a café that offers customers the opportunity to browse the Internet or play computer games at their tables while they drink coffee. The customer pays a fee based on the amount of time spent signed on to the computer. The store also sells books, tee shirts, and computer accessories. CyberAge has been paying all of its bills on the last day of the payment period, thus forfeiting all supplier discounts. Shown below are data on CyberAge’s two major vendors, including average monthly purchases and credit terms.
Vendor Average monthly purchases Credit terms
Web Master $25,000 2/10,net 30
Softidee 50,000 5/10, net 90
Should CyberAge use trade credit and continue paying at the end of the credit period?