You manage a warehouse and need to replace a forklift. A local retailer sells the model you want for $1,299 plus a 6% sales tax. A store located just over the state line sells the same model for $1,359 plus a 4% sales tax.

The local retailer’s total is $1,299 × 1.06 = $1,376.94, including 6% sales tax. The other store’s total is $1,359 × 1.04 = $1,413.36. Since $1,376.94 is lower, the local retailer is the less expensive option: $1,376.94.

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