Please answer all the questions immediately. Thank you.

1. Amorganda Store obtained

P50,000 worth of merchandise from

MC wholesalers based on terms of

2/10-N-30. the merchandise was

invoiced on March 29, 2004, the

discount period will end on April 9.

On April 2 Amorganda Store bank

offered to give the owner an

unsecured loan of P50,000 payable

in 1 year at 18% per year, the interest

will be paid at the end of the term.

Should Amorganda Store get the loan

and pay MC Wholesalers within the

discount period?

2. 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.

3. Wholesaler A borrowed P100.000

from ABC Bank, What are Wholesaler

A's cost of Credit?

4. What is mean by economy of

scale?

5. How are prices affected by the

availability of amounts of credit?

6. What are linkage enterprises and

how will they benefits from the

availability of large amounts of

credit?