Aberwald Corporation Aberwald Corporation Expects to Order 126,000 Memory Chips for Inventory

question 155

Multiple Choice

Aberwald Corporation
Aberwald Corporation expects to order 126,000 memory chips for inventory during the coming year, and it will use this inventory at a constant rate. Fixed ordering costs are $200 per order; the purchase price per chip is $25; and the firm's inventory carrying cost is equal to 20 percent of the purchase price. (Assume a 360-day year.)
-Refer to Aberwald Corporation.How many orders should Aberwald place during the year?

• A) 12
• B) 25
• C) 30
• D) 40
• E) 60

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Definitions:

Statutory Law

Law enacted by a legislative body, forming a codified set of rules that are legally enforceable.

Annual Mortality Rate

The proportion of individuals in a population who die within a one-year period, often expressed per 1,000 or 100,000 persons.

Medical Technology

The application of scientific research and equipment to improve the diagnosis, treatment, and prevention of diseases and health conditions.

Present Discounted Value

The value of a future amount of money in today's terms, discounted by a specific interest rate to account for the time value of money.