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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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
Transcribed Image Text:Financial Management Decision Making:
1. Mr. A is the owner of a grocery store. He was informed by the Fortune Cigarette supplier today that the price
of Fortune Cigarette starting March 01, 2021 will be 1,000.00 per pack (Former Price of 900.00). He constantly
orders 300 packs of Fortune Cigarette every week. Mr. A has extra cash of 270,000.00, would he grab the
opportunity and double his weekly purchase of cigarettes before the price increase?
2. Given the same scenario in number 1 but here Mr. A has NO extra cash. But Mr. A can immediately make a
bank loan of 270,000.00, two months to pay and with total interest for two months of 50,000.00 would he grab
the opportunity and double his weekly purchase of cigarettes before the price increase?
3. Given the same scenario in number 1 but here Mr. A has NO extra cash. But Mr. A can immediately make a
bank loan of 270,000.00, two months to pay and with total interest for two months of 10,000.00 would he grab
the opportunity and double his weekly purchase of cigarettes before the price increase?
4. Mr. B is the owner of a hardware store. His ten wheeler truck is under going major repair. Mr. B badly
needed 1,000 bags of cement to fill the orders of his loyal customers. The 1,000 bags of cement should be
picked up from the production site in Bulacan. If he will hire a trucking service, he would only break-even with
all the cost of trucking against the profit he would make. What do you think Mr. B decided?
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