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Plumbridge Co. has the following options: a) fborrow at 15%, pay the purchase invoice of $100,000 immediately

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Question;1) Plumbridge Co. has the following options: a) fborrow at 15%, pay the purchase invoice of $100,000 immediately and take a 3% cash discount, or b) use accounts payable and pay after 90 days. Which option is more economical for the firm and why?2) Determine the precise cost of not using a cash discount under the terms 3/10 net 40?3) LL Bolts and Nuts purchases 10,000 units of a particular item per month. The monthly storage cost per item is $0.10 and each order costs $50. Determine the EOQ of this company?

 

Paper#50708 | Written in 18-Jul-2015

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