Use the Table Below to Answer the Following Question(s)

question 50

Multiple Choice

Use the table below to answer the following question(s) .
Below is the spreadsheet for an economic order quantity model.

Assume that the distribution of demand is normal with a mean of 20,000 and standard deviation of 2,000.
-What is the reorder point required to attain a 95% service level?

• A)460.0
• B)750.5
• C)571.0
• D)640.5

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Definitions:

WACC

The calculation used by firms to evaluate the cost of their financing and investments, taking into account the weighted proportions of each source of capital, including equity and debt.

WACC

Weighted Average Cost of Capital, a calculation of a firm's cost of capital in which each category of capital is proportionately weighted.

Capital Budgeting

The process of evaluating and selecting long-term investments that are consistent with the firm's goal of wealth maximization.

After-Tax Cost

The net cost of a transaction or investment after the effects of taxes are considered, often used in analyzing the cost of financing options.