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Determining cost of purchase
The following is an excerpt from a conversation between Eric Jackson and Carlie Miller. Eric is debating whether Co buy a stereo system from First Audio, a locally owned electronics store, or Dynamic -Sound Systems, an online electronics company.
Eric: Carlie, I don't know what to do about buying my new stereo.
Carlie: What's the problem?
Eric: Well. I can buy it locally at First Audio for $890.00. But Dynamic Sound Systems has the same system listed for $899.99.
Carlie: So what's the big deal? Buy it from First Audio.
Eric: It's not quite that simple. Dynamic Sound Systems said something about not having to pay sales tax. since I was out of state.
Carlie: Yes, that's a good point. If you buy it at First Audio, they'll charge you 6% sales tax.
Eric: But Dynamic Sound Systems charges $13-99 for shipping and handling. If I have them send it next-day air. it'll cost $44.99 for shipping and handling.
Carlie: 1 guess it is a little confusing.
Eric: That's not all. First Audio will give an additional 1% discount if I pay cash. Otherwise, they will let me use my VISA, or I can pay it off in three monthly installments.
Cariic: Anything else???
Eric: Well ... Dynamic Sound Systems says I have to charge it on my VISA. They don't accept checks.
Carlie: I am not surprised. Many online stores don't accept checks.
Eric: I give up. What would you do?
What might be some considerations other than price that might influence Eric’s decision on where to buy the stereo system?
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Chapter 4 Solutions
Survey of Accounting (Accounting I)
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