Neco 2019 Commerce Question 6

A wholesaler imports bulk quantities of bottled drinking water from three different suppliers (A, B and C). The details are as follows:\n\n- Supplier A offers a unit price of \(\₦120\) with a 30‑day credit period and a 2% cash discount if payment is made within 10 days.\n- Supplier B charges \(\₦115\) per unit but requires full cash payment on delivery (no credit).\n- Supplier C provides a unit price of \(\₦118\) with a 60‑day credit period but imposes a 1.5% surcharge on the invoice if payment is delayed beyond 45 days.\n\nThe wholesaler needs to purchase 10,000 units each month and aims to minimise the effective cost while maintaining adequate cash flow. Assume the wholesaler's annual cost of capital is 12% (i.e., a monthly cost of capital of 1%).\n\nAnswer the following: