The Manager of the Quick Stop Corner Convenience Store (Which

question 119

Multiple Choice

The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 per six-pack (each case of Stein beer contains four six-packs) . Orders arrive three days from the time they are placed. Daily holding costs are equal to 5 percent of the cost of the beer.
If he were to order 16 cases of Stein beer at a time, what would be theaverage daily total inventory costs, EXCLUDING the cost of the beer?

• A)$2.00
• B)$4.00
• C)$1.28
• D)$3.28
• E)$2.56

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Definitions:

Coupon Bond

A type of bond that pays the holder a fixed interest payment (coupon) at regular intervals until the bond's maturity, when the principal is repaid.

Current Yield

The annual income (interest or dividends) divided by the current price of the security, used primarily for bonds.

Trading

The buying and selling of financial instruments like stocks, bonds, commodities, and derivatives within financial markets.

Coupon Bond

A bond that pays the holder periodic interest payments based on a pre-defined rate (the coupon rate) until maturity when the principle is also repaid.