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Bobs radio shop wants to buy a line of new shortwave radios. Manufacturer A offers chain discounts of 19/10, while manufacturer b offer discounts 18/11. Assume both manufacturers have the same list price. Which manufacturer should Bob buy from?

2007-06-28 04:00:31 · 1 answers · asked by always_smiling98 1 in Science & Mathematics Mathematics

1 answers

If cash flow permits, 19/10, most discount.
Consider one percent every ten days, assuming a purchase is made regularly in that time period.
That works out to 36.5 payments per year, again assuming a purchase every ten days. At 1%=36.5% discounts.
18/11 loses that much, for an extra day to pay. Not good economics.

2007-06-28 04:20:17 · answer #1 · answered by ed 7 · 0 0

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