Amax Co has received an offer of a discount for bulk purchase from Bard Co$,$ one of its major suppliers. Bard Co has offered a $0\mathrm{.}5\%$ discount on orders of $60,000$ units or more of Component X$.$ Amax Co currently consumes $240,000$ units of Component $x$ each year and places orders of $20,000$ units at the end of each month. Holding cost for Component $x$ is $$1$ per unit per year and ordering costs are $$250$ per order. Amax Co does not maintain any buffer inventory of Component $x$

Colix Co$,$ a major supplier of Component $M$ to Amax Co$,$ has offered a $1\%$ early settlement discount for payment within $30$ days. Amax Co currently takes $72$ days to settle outstanding invoices with Colix Co

Amax Co has a cost of short$-$term finance of $6\%$ through an overdraft and no surplus cash. Assume that there are $360$ days in each year.

Amax Co currently has decentralised treasury operations, but is considering implementing a centralised treasury department.

$24.$ Using months as a basis, what is the financial consequence of accepting the bulk purchase discount?

$$ Benefit of $$8,000$ per year

Benefit of $$12,000$ per year

Cost of $$13,000$ per year

$$ Cost of $$8,000$ per year