Question: Instant Paperclip office supply attempts to gain advantage over its competitors by providing quality customer service that includes prompt delivery of orders by truck or van and always being able to meet customer demand from its stock. In order to achieve this degree of customer service, it must stock a large volume of items on a daily basis at a central warehouse and at 3 retail stores in the city and burbs. Inventory levels are maintained by borrowing cash on a daily basis from the bank. Estimates for the coming fiscal year the company’s demand for cash to pay for inventory will be $17,000 per day for 305 working days. Any money borrowed during the year must be repaid with interest by the end of the year. Annual interest rate charged by the bank is 9%. If a loan is taken out to purchase inventory, the bank charges the company a loan origination fee of $1200 plus 2 ¼ points (2.25% of the amount borrowed)