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The following is an excerpt fr

The following is an excerpt from a conversation between Kate Fleming and Bob Dent. Kate is debating whether to buy a stereo system from Design Sound, a locally owned electronics store, or Big Sound Electronics, an online electronics company.

Kate: Bob, I don’t know what to do about buying my new stereo.

Bob: What’s the problem?

Kate: Well, I can buy it locally at Design Sound for $580.00. However, Big Sound Electronics has the same system listed for $599.99.

Bob: So what’s the big deal? Buy it from Design Sound.

Kate: It’s not quite that simple. Big Sound said something about not having to pay sales tax, since I was out-of-state.

Bob: Yes, that’s a good point. If you buy it at Design Sound, they’ll charge you 8% sales tax.

Kate: But Big Sound Electronics charges $18.99 for shipping and handling. If I have them send it next-day air, it’ll cost $24.99 for shipping and handling.

Bob: I guess it is a little confusing.

Kate: That’s not all. Design Sound will give an additional 1% discount if I pay cash.

Otherwise, they will let me use my VISA, or I can pay it off in three monthly installments.

Bob: Anything else???

Kate: Well . . . Big Sound says I have to charge it on my VISA. They don’t accept checks.

Bob: I am not surprised. Many online stores don’t accept checks.

Kate: I give up. What would you do?

1. Assuming that Big Sound Electronics doesn’t charge sales tax on the sale to Kate, which company is offering the best buy?

2. What might be some considerations other than price that might influence Kate’s decision on where to buy the stereo system?


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