- This topic has 1 reply, 2 voices, and was last updated 2 years ago by
.
- Posts
A supplier is offering an early settlement discount if invoice is settled a minimum of 8 days prior to the end of the month based on an int rate of 8% . if one invested the funds one would earn 6.5% Should one settle early or investment and settle the last day of the month
Say the payment amount was 1,000,000, then the settlement would be (1,000,000*8%)/365*8 = 1,753.42
When Investment the funds do I compute (1,000,000 x 6.5%) /365*8 so as to determine whether one should settle early or forgo the settlement discount and rather keep the funds invested and settle the last wotking day of the month ?
This is the “general” forum – for non-exam-specific queries.
If this is FM, you can ask a fellow student here https://opentuition.com/forum/acca-forums/acca-fm-financial-management-forums – or the tutor here https://opentuition.com/forum/ask-acca-tutor-forums/ask-the-tutor-acca-financial-management-fm-exams
- You must be logged in to reply to this topic.