Finance Question....I have an idea, but I just needed to be sure.

Question

Nichole runs a restaurant, she usually pays $3.00 per package of coffee, but the supplier has offered her a deal of $2.00 per package of coffee if she purchases 1000 packages, but she will need to purchase a freezer for $400. She will therefore save $600 if she were to take the deal.

What other factors (positive and negative) should Nichole consider in her decision.

Answer 1

1. How long will it take Nichole to sell 1000 packages of coffee? She may not do enough business to make it worth the purchase.

2. Does she have the $2000 on-hand to make this purchase?

3. Does she have the space for a freezer? Will it effect her utility bills?

4. What is the quality of the coffee? Is it equivalent?

5. Is the supplier reliable and trustworthy?