Risa,Inchas Provided the Following Extracts from Their Budget for the First

question 37

Multiple Choice

Risa,Inc.has provided the following extracts from their budget for the first quarter of the forthcoming year: $$\begin{array} { | l | c | c | c | } \hline & \text { Jan } & \text { Feb } & \text { March } \\\hline \text { Purchases on account } & \$ 274,000 & \$ 295,000 & \$ 330,000 \\\hline\end{array}$$ The vendors are allowed the following terms of payment:
$$\begin{array} { | l | l | } \hline \text { Month of purchase } & 10 \% \\\hline \text { First month after the purchase } & 35 \% \\\hline \text { Second month after the purchase } & 35 \% \\\hline\end{array}$$ Calculate the total payment on account for the month of March.

• A) $125,925
• B) $179,235
• C) $330,000
• D) $232,150

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Definitions:

European Put Option

A contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price on or before a specified date.

Reorder Point

The inventory level at which a new order should be placed to replenish stock before it runs out, considering lead time.

Inventory Level

The quantity of goods or materials on hand at any given time, which is crucial for meeting demand without excessive holding costs.

Replenish

The process of filling or restocking products, supplies, or inventory to return to a desired level.