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Cash discount / extended credit period

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Querist : Anonymous

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Querist : Anonymous (Querist)
25 June 2012 My average monthly purchases amount to Rs 68 lacs and I get discount of Rs. 1.35 lacs if I pay withing 7 days of purchase where as the normal credit period is 30 days. Whether to avail discount or defer payment to 30 days and invest in 30 days FD? What would be the better option and why?
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C.A Anshul Singhal

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C.A Anshul Singhal (Expert)
25 June 2012 You Should Avail Cash Discount.
Answer depend on rate of discount & F.D rate.
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Murtaza I Bhagat

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Murtaza I Bhagat (Expert)
25 June 2012 I think you should have to take Cash discount
if its 2% then it is better than F.D Rate
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