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    Cash Rebates: sound practice? Ethical? Percentage actually paid?

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    Among the cash management techniques used by most businesses are those that slow down their bill payments. A good example for this is "Cash Rebates" offered on household items like computers and other electronics.

    1. Are these practices sound business decisions? Are they ethical? Explain.

    2. What percentage of the rebates offered are actually paid?

    Select a business of your choice and explain whether you would recommend this business use cash rebates.

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    Solution Preview

    1. Cash Rebates is not an example for slowing payments but it is a tool for decreasing collection period and fast recovery of sales. Cash rebate is an incentive offered by the seller to encourage the buyer to pay within a stipulated time. For example, if the terms are 2/10/N 30, the buyer may deduct 2 percent ...

    Solution Summary

    In a 219 word solution, the response clearly answers each question explaining the concept and the results of using rebate strategies.