Problem 2 – Trade and Cash DiscountsBluth Real Estate Co. is dismantling Sudden Valley, their disastrous McMansiondevelopment in Burnaby, British Columbia. All the homes are being sold to a hedgefund...

Problem 2 – Trade and Cash DiscountsBluth Real Estate Co. is dismantling Sudden Valley, their disastrous McMansiondevelopment in Burnaby, British Columbia. All the homes are being sold to a hedgefund group based in Singapore, and will never be occupied. To squeeze as much moneyout of the development as they can, the young C.O.O. George Michael Bluth is sellingall of the household appliances in the Sudden Valley homes.George Michael arranged to sell 40 refrigerators to the appliance warehouse of an oldfamily friend, J. Walter Weatherman, for $1600 each. George Michael sweetened the dealwith a variety of trade and cash discounts, but also clawed much of that money backthrough additional charges.Weatherman left George Michael with a single piece of advice, “And that’s why youdon’t stiff your grandpa’s old friends.”1. What is the sale price of all 40 refrigerators? 1 mark2. George Michael hired his uncle George Jr’s shipping company, Intense Trucks, todeliver the refrigerators to Weatherman. Intense Trucks charges $550 to ship eachrefrigerator, plus British Columbia’s HST of 12%. How much does Intense Truckscharge for the entire shipment? 3 marks3. George Michael arranges to ship the refrigerators FOB Shipping Point. Who paysthe shipping charges, Bluth Co. or Weatherman? 1 mark4. George Michael offers Weatherman a trade discount of 30% (not including shippingfees). How much money is this discount worth? 2 marks5. Bluth Co. issues Weatherman’s warehouse an invoice that also includes a cashdiscount to encourage early payment: 3/10, 2/15, 1/20, net/30. How much wouldWeatherman pay in each discount period? 6 marks6. What is the least amount of money Weatherman could pay in this entire transactionwith Bluth Co.? What is the highest amount? Explain why. 2 marks