Company Is Planning for Its Financing Needs and Uses the Basic

question 4

Multiple Choice

company is planning for its financing needs and uses the basic fixed-order quantity inventory model.Which of the following is the total cost (TC) of the inventory given an annual demand of 10,000,setup cost of $32,a holding cost per unit per year of $4,an EOQ of 400 units,and a cost per unit of inventory of $150?

• A)$1,501,600
• B)$1,498,200
• C)$500,687
• D)$499,313
• E)None of these

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Definitions:

Common Stock

A type of equity security representing ownership in a corporation, with rights to dividends and voting in shareholder meetings.

Legal Expense

Costs incurred by a company for legal services, including attorney fees, court costs, and other related expenses.

Paid-In Capital

The total amount of money or other value that shareholders have contributed to a company in exchange for shares of stock, indicating the funds raised from equity rather than from ongoing operations.

Par Value

The face value of a bond or the nominal value of a stock, as stated by the issuing company in its charter.