How many extra pads of computation paper should he buy

Reference no: EM132171252

Question - Dale saw that the campus bookstore is having a special on pads of computation paper normally priced at $3 a pad, now on sale for $2.50 a pad. This sale is unusual and Dale assumes the paper will not be put on sale again. On the other hand, Dale expects that there will be no increase in the $3 regular price, even though the inflation rate is 2% every 3 months. Dale believes that competition in the paper industry will keep wholesale and retail prices constant. He uses a pad of computation paper every 3 months. Dale considers 19.25% a suitable minimum attractive rate of return. Dale will buy one pad of paper for his immediate needs. How many extra pads of computation paper should he buy?

Reference no: EM132171252

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