A firm buys raw material for Rs 50,000 on a credit term of 2/10 net 30. It has to opt for one of two alternatives. One is to pay within 30 days. The other is to stretch the payment by 20 days more or...

A firm buys raw material for Rs 50,000 on a credit term of 2/10 net 30. It has to opt for one of two alternatives. One is to pay within 30 days. The other is to stretch the payment by 20 days more or to 50 days and to pay a penal interest rate of 1%. Find which one of the two alternatives will be more suitable with a given opportunity cost of capital at 15% p.a.