Answer:
A.
$0.05
B.
$18,600
C.
30,000 units
Explanation:
Economic order quantity is the quantity at which business incur minimum cost. This is the level of order where the holding cost equals to the ordering cost of the business.
As per given data
Annual Demand = 90,000 batteries
Ordering cost = $250
Carrying cost = $0.046
A.
Annual Holding cost = Holding cost per unit x Annual Demand = $0.046 x 90,000 batteries = $4,140
Opportunity cost = $0.046 X 110% = $0.05
B.
Purchase cost = 90,000 x $0.14 = $12,600
Ordering cost = (90,000/15,000) x $250 = $1,500
Storage cost = $0.05 x 90,000 = $4,500
Total cost of Inventory = $12,600 + $1,500 + $4,500 = $18,600
C.
EOQ =
EOQ =
EOQ = 30,000
Answer:
V(n)=140,000-10000n
V(7)=$70,000
Explanation:
Purchase Cost= $140,000
Value After 11 Years =$30,000
Depreciation per Year =
The truck depreciates at a rate of $10000 per year.
Using straight-line depreciation, the value of the truck in dollars, V
The linear function of its age in years n, V(n)=140,000-10000n
When the truck is 7 years old
n=7
Truck's Value, V(n)=140,000-10000n
=140,000-(10000X7)
=140,000-70000
=$70,000
Answer:
The penalty will be worth $200.
Explanation:
The certificate of deposit is worth $20,000.
The interest rate on it is 6%.
The penalty on early withdrawal is 2 months of interest.
The annual interest
The penalty will be