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Incredible Investment Yields Go Untapped

Is your organization's safest investment being ignored? Does your business take advantage of vendor's discounts?

Typical discount: Pay in 10 days and get a 2% discount, or pay the full amount in 30 days.

Financial opportunity: Convert the discount to an annual rate. There are eighteen 20-day periods in a year x 2% = 36% rounded).

Financial opportunity lost: Use the formula below to determine the annual cost of not taking a discount.

Cash Discount Offered 365 days
------------------------------------------- ------------------------------------
100% less percent cash discount offered Number of days between the date net payment is due and  the date payment is required to earn the discount

For example, assume a 2% discount if paid in 10 days, net 30 days.

   2% 365 days 
-----------------------  X  -------------------------- =  .0204 x 18.25 = 37.23%
98% 20 days

Start taking advantage of this meaningful investment opportunity if it is available.



 
 
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