QUESTION THREE A construction supplier presents the following data in respect of their purchases: Required: 3.1.1 Determine the economic order quantity (EOQ). (5) 3.1.2 Determine the ordering point. (5) 3.1.3 Calculate the danger level. (5) 3.2 Assume that Time Ltd are offered terms of 1,5/10 net 30 . If the embedded discount is not taken, then the full amount becomes due. Calculate the cost of forgoing the discount. (5) 3.3 ConstruKt Ltd factors all its accounts receivables. The factoring agreement they have concluded is that a 10% reserve is held and a 3% commission is charged on the book value of the account. Further interest is charged at 2% per month (60\% per annum) on advances. 2 ConstruKt Ltd wants to factor an account of R8 000 that falls due in 30 days. 3.3.1 Calculate the advance that ConstruKt Ltd will receive. (7) 3.3.2 Calculate the net cost to ContruKt. (3) QUESTION THREE A construction supplier presents the following data in respect of their purchases: Required: 3.1.1 Determine the economic order quantity (EOQ). (5) 3.1.2 Determine the ordering point. (5) 3.1.3 Calculate the danger level. (5) 3.2 Assume that Time Ltd are offered terms of 1,5/10 net 30 . If the embedded discount is not taken, then the full amount becomes due. Calculate the cost of forgoing the discount. (5) 3.3 ConstruKt Ltd factors all its accounts receivables. The factoring agreement they have concluded is that a 10% reserve is held and a 3% commission is charged on the book value of the account. Further interest is charged at 2% per month (60\% per annum) on advances. 2 ConstruKt Ltd wants to factor an account of R8 000 that falls due in 30 days. 3.3.1 Calculate the advance that ConstruKt Ltd will receive. (7) 3.3.2 Calculate the net cost to ContruKt. (3)