A Company Carries an Average Annual Inventory of $1,000,000

question 6

Multiple Choice

A company carries an average annual inventory of $1,000,000. If the cost of capital is 10%, storage costs are 8%, and risk costs are 7%, what does it cost per year to carry this inventory?

• A) $100,000
• B) $80,000
• C) $70,000
• D) $250,000
• E) cannot be determined from the data given

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Definitions:

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