CLEP Marketing Practice Exam 2026 – All-in-One Guide to Achieve Top Scores!

Question: 1 / 400

What is a potential goal of offering a cash discount?

To encourage longer payment terms

To minimize payment collection efforts

Offering a cash discount is primarily aimed at minimizing payment collection efforts. By providing a discount for payments made promptly, businesses incentivize customers to pay sooner rather than later. This early payment can lead to improved cash flow management, reducing the time and resources spent on follow-ups and collections. It also tends to decrease the likelihood of late payments, which can complicate financial management for a business.

Encouraging longer payment terms, enhancing customer relationships, and increasing shipping times do not align with the direct financial objective of offering a cash discount. Each of these factors may play a role in overall business strategy, but they do not specifically address the immediate goal of encouraging quicker payments. Cash discounts effectively streamline the payment process and foster a quicker turnover of accounts receivable.

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To enhance customer relationships

To increase shipping times

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