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    Cash Rebates as cash management techniques: are they effective and ethical?

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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 you are familiar with and explain whether you would recommend this business use cash rebates.

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    Solution Preview

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

    Cash rebates are provided by the manufacturer directly to the customer generally at the point of sale to decrease the net price of the item. Consumers elect to credit these cash rebates as down payments against the price of the items. Attractive cash rebates can increase customers, boost spending and stimulate sales by lowering the cost of a product in the eyes of a customer, without actually dropping the price on the shelf. There are practical reasons that make rebates sound business decisions for companies. ...

    Solution Summary

    In a 407 word solution, the response gives opinions in answer to the questions asked about cash rebates.