Use This Information to Answer the Following Questions

question 19

Multiple Choice

Use this information to answer the following questions.
A bakery buys sugar in 15-pound bags.The bakery uses 5000 bags of sugar each year.Carrying costs are $20 per bag per year.Ordering costs are estimated at $5 per order.Assume that the bakery is open 250 days a year and its daily demand is estimated at 20 bags.It takes 5 days for each order of sugar to be filled.
-Refer to the information above.What is the average inventory held in a given cycle?

• A)0
• B)50
• C)25
• D)100
• E)75

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Definitions:

Tax Rate

The segment of financial income that is requisitioned by state authorities from individuals or businesses as tax.

All Equity

A capital structure of a company or financial strategy where all financing is derived from shareholders' equity rather than combining equity with debt financing.

Leverage

Utilizing borrowed capital to amplify the possible gains from an investment.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed on an annual basis.