Use This Information to Answer the Following Questions

question 12

Multiple Choice

Use this information to answer the following questions.
A cake factory can produce cakes at the rate of 500 per day.The factory supplies its cakes to local grocery stores at a rate of 250 per day.The cost to prepare the equipment for producing the cakes is $20.Annual holding costs are $2 per cake.Assume that the factory operates 250 days a year.
-Refer to the information above.What is the maximum inventory held in a given cycle?

• A)825.56
• B)790.57
• C)800
• D)900.39
• E)750.44

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Definitions:

Capital

The funds used to acquire the natural and human resources needed to provide products; also called financial resources.

Supplies

Materials, goods, or equipment required for operations in businesses or other organizations.