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Ever Lawn can invest its cash at 8 % per year. It costs Ever Lawn $ 1 4 5 to place each purchase order. Required

Ever Lawn can invest its cash at 8% per year. It costs Ever Lawn $145 to place each purchase order.
Required
What is the opportunity cost of interest forgone from purchasing all 252,000 units at the start of the year instead of in 12 monthly purchases of 21,000 units per order?
Would this opportunity cost be recorded in the accounting system? Why?
Should Ever Lawn purchase 252,000 units at the start of the year or 21,000 units each month? Show your calculations.
\table[[Difference in average investment,x,Investment percentage,=,Opportunity cost],[$,x,8%,$,114,878]]
Requirement 2. Would this opportunity cost be recorded in the accounting system? Why?
The opportunity cost would not be recorded in the accounting system, due to transaction being recorded in the accounting system.
Requirement 3. Should Ever Lawn purchase 252,000 units at the start of the year or 21,000 units each month? Show your calculations.
Begin by calculating the relevant costs for each alternative. Then, calculate the difference between the two alternatives.
Alternative A
Purchase 252,000 spark plugs at beginning of year
Annual purchase-order costs
Annual purchase costs
Annual interest income that could be earned
if investment in inventory were invested
Relevant costs
Alternative B
Purchase 21,000 spark
plugs at beginning of each month
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