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Superior Lawn, a manufacturer of lawn mowers, predicts that it will purchase 204.000 spark plugs next year. Superior Lawn estimates that 17,000 spark plugs will

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Superior Lawn, a manufacturer of lawn mowers, predicts that it will purchase 204.000 spark plugs next year. Superior Lawn estimates that 17,000 spark plugs will be required each month. A supplier quotes a price of 51 1.00 per spark plug. The supplier also offers a special discount option: If all 204,000 spark plugs are purchased at the start of the year a d scount of 2% of the S1 1.00 price will be given Superior Lawn an invest its cash at 10% per year. It costs Superior Lawn S260 to place each purchase order. Read the requirements Requirement 1. What is the opportunity cost of interest forgone from purchasing all 204,000 units at the start of the year instead of in 12 monthly purchases of 17.000 units per order? y cost. Requirements 1. What is the opportunity cost of interest forgone from purchasing all 204,000 units at the start of the year instead of in 12 monthly purchases of 17,000 units per order? 2. Would this opportunity cost be recorded in the accounting system? Why? 3. Should Superior Lawn purchase 204,000 units at the start of the year or 17,000 units each month? Shaw your calculatians 4. What other factors should Superior Lawn consider when making its decision? PrintDone

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