If the Order Quantity Per Order Is 2,000 Units,annual Demand

question 9

Multiple Choice

If the order quantity per order is 2,000 units,annual demand is 10,000,and cost per order is $50,then which of the following statements is true?

• A)There are five orders in the year.
• B)The total annual ordering cost is $2,500.
• C)The holding cost per unit is $2.50.
• D)The total annual holding costs are $25,000 (= $2.50 * 10,000).

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Definitions:

Return On Assets

A measure of how effectively a company uses its assets to generate profit, calculated as net income divided by average total assets.

Total Assets

The sum of all current and non-current assets owned by a company, indicating the total resources available for use in operations.

Market To Book Ratio

A ratio used to compare a company's market value (market capitalization) to its book value, providing insight into how the market values the company's equity.

Book Value Per Share

The financial measure that indicates the per-share value of a company's equity available to shareholders, calculated by dividing net assets by the total number of outstanding shares.