Not taking cash discounts is costly, and as a result, firms that do not take them are usually those that are performing poorly and have inadequate cash balances.

Question

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Not taking cash discounts can lead to higher costs for firms because they miss out on savings offered for early payment. Firms that are performing poorly or have inadequate cash balances may not be able to take advantage of these discounts, thus incurring higher expenses.

Not Taking Cash Discounts Is Costly, and as a Result