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Given the information below, use total analysis to determine which supplier is more cost-effective. Cost of working capital is 12% per year. Assume there are

Given the information below, use total analysis to determine which supplier is more cost-effective. Cost of working capital is 12% per year. Assume there are 360 days in a year. (04 Marks)

Information Given

Supplier A

Supplier B

Supplier C

Equipment purchase price

$6,110/unit FOB

$6,700/unit CIF

$6,520/ unit C&F

Terms

2/10 net 30

1/15 net 30

3/10 net 20

Number of motors needed

10

10

10

Weight per motor

150 lbs

130 lbs

170 lbs.

Distance fom Port

200 miles

150 miles

120 miles

Insurance

2% OF Purchase amount

2% OF Purchase amount

2% OF Purchase amount

Freight

1500

1500

1500

Installation fee

$2,000

No Charge

$500

Notes: 1) Transportation cost = $10/ton-mile 2) Per ton-mile = 2,000 lbs per mile

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