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Q 7: You are trying to decide which of two (2) firms to sell to. They are both in the wholesale plumbing business, but their
Q 7: You are trying to decide which of two (2) firms to sell to. They are both in the wholesale plumbing business, but their gross margin and inventory turn figures are very different. Alpha International has a maintained margin of 49% and inventory turns of 3.5. Beta Holdings has a maintained margin of 35% and inventory turns of 5.3. The standard payment terms offered to their customers by firms such as Alpha and Beta are 2% 10/Net 30. Which firm, Alpha or Beta, should you sell to? Why
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