Hello
Sir in chapter 4 e.g 1 and e.g 2 while calculating inventory cost per annum, we have not included purchase cost. However, in e.g 3 we have included purchase cost while calculating inventory cost per annum. Why is that so?
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working capital management
8y ago#1In the first two examples, the total purchase cost over the year remains the same and it is therefore irrelevant as far as the decision is concerned.
In the third example, the total purchase cost over the year changes (because of the discount) and therefore it is relevant for the decision.
I do explain this in the free lectures.
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