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With this loan, the cooperative can buy 1,000 feet of leather, 1 barrel of glue, and approximately 750 pares of soles. The total cost of the inversion will be c$80,000 (u$3,620). Because they will be buying in bulk, the can get better prices. The cooperative will sell the raw material to its members | at a mark-up in order to cover the cost of transportation, the interest on the loan, and to build a working capital fund for the cooperative.
Normally this amount of raw materials will be used within 1-2 weeks and will be sold in another 1-2 weeks. Therefore, the term of the loan will be 1 month. |
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