General Motors purchased on account a shipment of iron bars from Furnace Inc. and promptly paid within the discount period. Compute the total value of inventory purchased. (4 points) Invoice price: 220,000 Shipping cost (FOB destination point): 20,000 Purchase allowance for flawed pieces: 20,000 Cash discount offered: 5%

A) 189,000
B) 190,000
C) 209,000
D) 210,000
E) 249,000

Option C,$209,000 is the correct answer.

Explanation:

The total value of inventory purchased comprises of invoice price plus shipping cost,less allowance for flawed pieces as well as the cash discount received as shown computed below:

Invoice price                                                       $220,000

shipping cost                                                       $20,000

purchase allowance for flawed pieces              ($20,000)

Cash discount 5%*(220,000+20000-20,000)   ($11,000)

Total value of inventory purchased                      $209,000

The cash discount was taken because payment was made within the discount period

answerindividual preferences are not revealed in the market for the good;

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.