The calculation of the effective annual cash discount rate revisited

Oliver, Thomas W.; Kim, Paul
June 2000
American Business Review;Jun2000, Vol. 18 Issue 2, p50
Academic Journal
Provides methods for calculating the effective annual rates for cash discounts. Relationship between conventional discount rate, Clark's rate, daily compounded rate and continuously compounded rate; Importance of knowledge on effective cash discounts rate for sellers and buyers; Implications for credit policy decisions of selling firms.


Related Articles

  • Accounts Receivable Policy Under Stochastic Inflation. Giaccotto, Carmelo // Journal of Accounting, Auditing & Finance;Summer92, Vol. 7 Issue 3, p291 

    This paper investigates the problem of managing accounts receivable under uncertain inflation. In particular, we derive expressions for the cash discount and the length of the credit period under the assumption that the inflation rate can be modeled by a general autoregressive moving-average...

  • Accounts Receivable Policy Under Stochastic Inflation.  // Journal of Accounting, Auditing & Finance;Summer92, Vol. 7 Issue 3, p311 

    This section presents a professional adaptation of the paper Accounts Receivable Policy Under Stochastic Inflation by Carmelo Giaccotto, published in this same issue of Journal of Accounting, Auditing and Finance. It is widely recognized that trade credit is basically a loan extended by the...

  • Normative arguments from experts and peers reduce delay discounting. Senecal, Nicole; Wang, Teresa; Thompson, Elizabeth; Kable, Joseph W. // Judgment & Decision Making;Sep2012, Vol. 7 Issue 5, p566 

    When making decisions that involve tradeoffs between the quality and timing of desirable outcomes, people consistently discount the value of future outcomes. A puzzling finding regarding such decisions is the extremely high rate at which people discount future monetary outcomes. Most economists...

  • Haggle your way to Savings. Grant, Kelli B. // Good Housekeeping;Jul2008, Vol. 247 Issue 1, p97 

    The article offers tips on how to negotiate the prices and interest rates. It recommends to select the credit card offerings with the lowest interest rates that meet the consumer's credit standing. Consumers could compare and check the prices of appliances from big-name retailers in the Internet...

  • Negotiate your way to major savings. Lapin, Nicole // Redbook;Feb2016, p29 

    The article offers best ways of making savings through managing important negotiations. It states that hospital bills should be collected with all their itemized prices and a fair prices for the treatment in various hospitals should be inquired for asking a reduction on the bill. The article...

  • DON'T YOU BELIEVE IT... IN A DOWNTURN, DISCOUNTING WORKS. Dryburgh, Alastair // Management Today;Mar2009, p16 

    The article reports on the reasons why discounting is not good for the business. According to McKinsey & Co., a one percent reduction in price will produce an 11% reduction in profit. Meanwhile, the discounting concept will leave the company short in money. It also notes that being cheapest in...

  • Weekly T-Bills Go At 4.870%, 4.840% Highs. Smith, Nicole M. // Bond Buyer;12/5/2006, Vol. 358 Issue 32521, p2 

    The article reports on the tender rates of the Treasury Department's 91-day and 182-day discount bills in the U.S. The rate of the bills were lower due to the 4.870% high rate from the 4.905% rate and the 4.840% high rate from the 4.935% rate, which were received for three months. The total...

  • CONSUMER CREDIT. CISSELL, ROBERT; CISSELL, HELEN // America;11/7/1964, Vol. 111 Issue 19, p552 

    The article focuses on the rapid increase of consumer credit in the U.S. which include both installment and noninstallment debt. Data show that average debt service increased by 21% of disposable income in 1963 from 13% in 1950. It cites the benefits when a family operates on a cash basis...

  • how to save in May. Hudepohl, Dana // Real Simple;May2011, Vol. 12 Issue 5, p197 

    The article offers suggestions on money saving during the month of May. It suggests purchasing various picnic related supplies including plates and plastic utensils as most of the retail stores reduce their prices by 50% and recommends refinancing an automobile loan as it can reduce interest...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics