Please discuss in your own words the differences between con

Please discuss (in your own words) the differences between contract purchasing and spot purchasing. No cut & paste please!!

Solution

Differences between contract purchase and spot purchase:

Contract Purchase, is a agreement purchase between two business people. which is also known as forward contract or future contract.if a company purchase a car with contract,both buyer and sellerwill put agreement for the car payment that is fixed monthly instalments.they put agreement for monthly instalments for certain period. then the buyer will pay for that car for every month until the agreement date.when the instalments will reach to end then the buyer has the chances topurchase that car for predetermined amount this is said to be balloon payment.

Spot Purchase, is very contrast to the contract purchasing that it has no instalments and no agreement between both buyer and seller. Here immediat payment only acceptible within the spot date with spot rate is known as spot purchase.