Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
10-100 provide explanation and solution
Transcribed Image Text:100. American Coat Company estimates that 60,000 special zippers will used in the
manufacture of men's jackets during the next year. Reese Zipper Company has quoted
a price of P.60 per zipper. American would prefer to purchase 5,000 units per month,
but Reese is unable to guarantee this delivery schedule. To ensure availability of these
zippers, American is considering the purchase of all 60,000 units at the beginning of
the year. Assuming American can invest cash at 8%, the company's opportunity cost of
purchasing the 60,000 units at the beginning of the year is.
а. Р1,320
b. P1,440
P2,640
d. P2,880
C.
(cma)
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