Question
As a new CFO, you are evaluating some Cash Discounts Terms from a Supplier. The Terms are 3/10, Net 30. You currently earn 4% in
As a new CFO, you are evaluating some Cash Discounts Terms from a Supplier. The Terms are "3/10, Net 30." You currently earn 4% in your checking account. Should you take the discount?
Group of answer choices
No, because the 3% Discount in the Terms is less than the 4% interest you could earn in the checking account.
Yes, because the 3% Discount means I save $3.00 on every $100.00 I owe the Supplier.
No, because I can keep the money in the checking account for an extra 20 Days (30 - 10 = 20).
Yes, because the 4% earned in the checking account is less than the cost of not taking the discount.
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