Project #8609 - Finance

There is no such thing as a free lunch.  This term is commonly mentioned when describing interest free financing arrangements.  Car dealers, retailers and inventory suppliers regularly offer interest free financing to attract business.  The textbook discusses discounting these arrangements to recognize the time-value of money and the riskiness in the arrangements.

Please describe the terms of a discounted loan in your own words and the effect they have on the bottom lines of the creditor and debtor.  Please explain why they are so widely used and the analysis challenges presented when comparing firms in an industry when only some company's offer these terms.  You must cite 2 sources.

Subject Business
Due By (Pacific Time) 07/06/2013 10:00 pm
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