The primary disadvantage to a company in NOT taking a cash discount offered by a

Question

The primary disadvantage to a company in NOT taking a cash discount offered by a vendor (for example to pay the invoice within 10 days of receipt of invoice and receive a 2% reduction in the amount due) is ... A. that it shortens the Operating Cycle. B. that it increases the average time period to liquidate company's Inventory. C. The Cash can be used for other business purposes. D. by not taking advantage of the discount the company is essentially borrowing from the vendor which is generally creating an expensive form of short term financing. E. All of the above.

Explanation / Answer

Answer :

By not avialing the cash discount and taking a little more time to pay its creditors the company is :

So the answer is E All of the above

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