A reason for granting cash discount is to___________

Assessment: WAEC SSCE - Marketing - 2015 (Objective) Subject: Marketing

Question 1 Report

A reason for granting cash discount is to___________

Answer Details
The reason for granting cash discount is to encourage prompt payment. Cash discount is a reduction in the amount to be paid by a customer in exchange for prompt payment of an invoice. By offering a cash discount, a seller encourages the customer to pay the invoice earlier than the agreed upon payment terms, thus improving the seller's cash flow. This benefit outweighs the loss of profit from the discount. Additionally, it reduces the risk of bad debts and minimizes the need for bookkeeping work, making it easier to manage the accounts receivable.
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