* GB Whole Trade is trying to

decide whether to give credit to its

retailers. To finance these credits.

GSB must obtain a bank loan. The

going and the best rate is from Bank

A. which is at an effective rate of 22%

per year. Should GSB decide to give

credit to its retailers, the term should

be used 1/10 N 60. GSB has only 10

retailers. The cost of monitoring the

accounts should they be granted, ill

be very minimal and insignificant.

Also GSB expects no bad debts, its

10 customers have been in business

for over 20 years. GSB is positive that

all retailers is given a maximum of

15.000, which expected to be all fully

used up GSB-re-priced its

merchandise and added 2% to its

whole prices. No. of retailers (10),

Monthly sales without credit

P100.00. with credit P250.000.

Should GSB grant credit to its

retailers? support your answer.

* Wholesaler A borrowed P100.000

from ABC Bank. What are Wholesaler

A's cost of Credit?

*What is mean by economy of

scale?

*How are prices affected by the

availability of amounts of credit?

*What are linkage enterprises and

how will they benefits from the

availability of large amounts of

credit?