This task is a cash decision. Paying an invoice early buys a small discount and gives the cash away for ten days. Paying on the contract date keeps the cash and refuses the 2 percent. Say what that cash is for: payroll, a shipment, or a reserve. A hope that the relationship will feel better is not a use of cash.
The firm can pay an invoice early and take 2 percent off, or pay on the contract date and keep the cash. Choose. Name what the cash is for.
Professor
Our supplier offers 2 percent off if we pay the invoice ten days early. Finance wants to keep the cash until the contract date. Should we pay early?
Sofia
Pay early. Two percent is free money, and the supplier will remember who pays.
Ken
Wait. The cash covers payroll if the quarter misses the forecast. A relationship is not a reason to be early.
14:00
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Before you check the quiz
You chose pay early or wait.
You said what the 2 percent or the cash is actually for.