BB's Basement, a Bargain Retail Outlet, Purchases $4,000 of End

BB's Basement, a bargain retail outlet, purchases $4,000 of end of line clothing inventory from J&P Manufacturing and is granted credit terms of 45 days. BB sells out the inventory for $6,000 within two weeks. Proceeds from the sale after salaries, rent and other expenses, but before paying off accounts payable, is $4,500. If BB can make 3% per annum on a 30-day Guaranteed Investment Certificate (GIC) , how much did BB make on the jeans and on managing its working capital?

A) $135
B) $500
C) $511
D) $620
E) $635

Correct Answer:

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