Question

Sebastian buys his coffee every month for $25 at a local coffee shop. At a local warehouse store with a $60 annual fee, he can purchase the same coffee for $15. What is the BEST financial advice for Sebastian when it comes to purchasing his coffee?

A. He should buy coffee at the warehouse store because at the end of the year he will have saved money.

B. He should buy coffee at the coffee shop because at the end of the year he will have saved money.

C. It doesn’t matter where he buys the coffee; the price is exactly the same after 12 months.


D. If he buys coffee for only five months, he should just buy it at the coffee shop because it will be cheaper.

Answer 1

Answer:

A. He should buy coffee at the warehouse store because at the end of the year he will have saved money.

Explanation:

if he continues to buy his coffee at the local shop it will cost $300 at the end of the year. If he buys from the warehouse it will cost $240 at the end of the year.

Answer 2

The answer is A because paying the 60 dollars is a one time thing so for every other time he buys coffee it’ll be 15 dollars, way cheaper than 25