PURCHASE DISCOUNT Definition

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PURCHASE DISCOUNT is a reduction in the purchase price, allowed if payment is made within a specified period.

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FINANCING COST is the difference between the cost of financing the purchase of an asset and the assets cash yield. Positive carry means that the yield earned is greater than the financing cost; negative carry means that the financing cost exceeds the yield earned.

EARNING ASSET is an asset which provides income (e,g, rental property).

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