The following is an excerpt from a conversation between Ted Mackie and Laurie Van Dorn. Ted is debating whether to buy a stereo system from Classic Audio, a locally owned electronics store, or Sound Unlimited, an online electronics company.
Ted: Laurie, I don’t know what to do about buying my new stereo.
Laurie: What’s the problem?
Ted: Well, I can buy it locally at Classic Audio for $490.00. However, Sound Unlimited has the same system listed for $499.99.
Laurie: So what’s the big deal? Buy it from Classic Audio.
Ted: It’s not quite that simple. Sound Unlimited said something about not having to pay sales tax, since I was out of state.
Laurie: Yes, that’s a good point. If you buy it at Classic Audio, they’ll charge you 6% sales tax.
Ted: But Sound Unlimited charges $13.99 for shipping and handling. If I have them send it next-day air, it’ll cost $24.99 for shipping and handling.
Laurie: I guess it is a little confusing.
Ted: That’s not all. Classic Audio will give an additional 1% discount if I pay cash. Otherwise, they will let me use my VISA, or I can pay it off in three monthly installments.
Laurie: Anything else???
Ted: Well…Sound Unlimited says I have to charge it on my VISA. They don’t accept checks.
Laurie: I am not surprised. Many online stores don’t accept checks.
Ted: I give up. What would you do?
1. Assuming that Sound Unlimited doesn’t charge sales tax on the sale to Ted, which company is offering the best buy?
2. What might be some considerations other than price that might influence Ted’s decision on where to buy the stereo system?