If the firm decides to take the cash discount that is offered on goods purchased on credit, the firm should

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If the firm decides to take the cash discount, it should pay on the last day of the discount period. This allows the firm to hold onto the cash for as long as possible while still taking advantage of the discount. Paying before the discount period ends would mean sacrificing the time value of money, while paying after the discount period ends would negate the benefit of the discount altogether.

If the Firm Decides to Take the Cash Discount That