5M Inc. sells merchandise with a cost of $25,000 during the year to customer for $55,000. It is 5M’s policy to accept returns up to 60 days after the date of purchase. 5M estimates that there is a 60% probability that returns will be 3% of sales and a 40% probability that returns will be 2.5% of sales. What is 5M’s transaction price

The purchasing agent for a company that assembles and sells air-conditioning equipment in a latin american country noted that the cost of compressors has increased significantly each time they have been reordered. the company uses an eoq model to determine order size. what are the implications of this price escalation with respect to order size? what factors other than price must be taken into consideration?