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please answer 1-4 Superior Lawn, a manufacturer of lawn mowers, predicts that it will purchase 216,000 spark plugs next yoar Superior Lawn estimates that 18,000
please answer 1-4
Superior Lawn, a manufacturer of lawn mowers, predicts that it will purchase 216,000 spark plugs next yoar Superior Lawn estimates that 18,000 spark plugs will be required each month. A supplier quotes a price of 511.00 per spark plug The supptier also offers a special discouint option If all 216,000 spark plugs are purchased at the ritart of the year, a discount of 4% off the $11.00 peice will be given Saperior Lawn can invest its cash at 10% per year. It costs Supurior Lawn $290 to placo each purchase order Read the reguirements Requirement 1. What is the oppontunity cost of interest forgone from puctasing al 216,000 units at the start of then year itistead of in 12 monthly purchases of 18,000 units per order? Let's begin the calculation for the opportunity cost of interest forgone by fiest detiemining the formulir then calculate the oppotunity cost Requirements 1. What is the opportunity cost of interest forgone trom purchasing af 216 .000 unar at the start of the year instead of In 12 monthly purchases of 18,000 units per order? 2. Would this opportinity cost be recorded in the accounting systent? Why? 3. Should Superior Lawn purchase 216.000 units at the start of the year or ter dop units each month? Stiow your calculations Step by Step Solution
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