Consider the following data supplied by Cotton Tops,a t-shirt distributor: 
The manager charges equipment set-up costs as a separate cost to the purchase price of $4.92 per t-shirt.Calculate the savings/loss if Cotton Tops orders 5000 units at a time compared to 10 000 units at a time (assuming the discount only applies to orders of 10 000 units) .
Definitions:
Purchase Option
A clause in a contract that allows one party to purchase goods or assets from the other party at a predetermined price within a specified timeframe.
Market Rate of Interest
The prevailing rate at which interest is paid by borrowers for loans or earned by investors in the financial markets.
Face Value
The nominal or original value stated on a security or financial instrument, such as a bond or stock, at the time of its issue.
Interest Rate
The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan amount.
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