Trade and cash discounts are an important business tool

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Trade and cash discounts are an important business tool, and you will often find yourself on different sides of this, giving or receiving discounts. Remember, though, that these trade and cash discounts are either money given away entirely that you will never see or extensions of credit. You should never borrow 100% for everything nor is it a good idea to pay 100% cash all the time. If you are unsure as to why, go back and look at the Cash Flow discussion from Week 2. The question, though, is how comfortable are you with discounts? Would you rather take a discount for early payment or hold the cash for other uses and pay the full price? What are the advantages and disadvantages of each approach? Give some examples of when you might choose to do either of those.

Reference no: EM131964135

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