Please show your work on how to get to the answers

Lawnox, a manufacturer of lawn mowers, predicts that it will purchase 240,000 spark plugs next year. Lawnox estimates that 20,000 spark plugs will be required each month. A supplier quotes a price of $8.00 per spark plug. The supplier also offers a special discount option: If all 240,000 spark plugs are purchased at the start of the year, a discount of 4% off the $8.00 price will be given. Lawnox can invest its cash at 10% per year. It costs Lawnox $260 to place each purchase order. Read the requirements. Requirement 1. What is the opportunity cost of interest forgone from purchasing all 240,000 units at the start of the year instead of in 12 monthly purchases of 20,000 units per order? Let's begin the calculation for the opportunity cost of interest forgone by first determining the formula, then calculate the opportunity cost. Difference in average investment Investment percentage Opportunity cost 84,160 $ 841,600 10% = 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 no actual transaction being recorded in the accounting system. Requirement 3. Should Lawnox purchase 240,000 units at the start of the year or 20,000 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: Alternative B: Purchase 240,000 Purchase 20,000 spark plugs at spark plugs at beginning beginning of year of each month 260 $ 3,120 $ 1,920,000 Difference Annual purchase-order costs $ (2,860) (76,800) 1,843,200 Annual purchase costs Annual interest income that could be earned 92,160 8,000 84,160 if investment in inventory were invested $ 1,935,620 $ 1,931,120 4,500 Relevant costs The difference column indicates that purchasing 20,000 spark plugs at the beginning of each month is preferred relative to purchasing 240,000 spark plugs at the beginning of the year. Requirement 4. What other factors should Lawnox consider when making its decision? If other incremental benefits of holding lower inventory such as lower insurance, materials handling, storage obsolescence, and breakage costs were considered, the costs under Alternative A would have been higher, and Alternative B would be preferred even more