Sound Systems Inc

question 37

Multiple Choice

Sound Systems Inc.wants to use the economic ordering quantity model to determine the optimal order quantity of speakers.The wholesale unit purchase price to Sound Systems is $50,and annual sales at a $100 per unit retail price total $50,000.The fixed cost of placing an order is $10,and the carrying cost is 50 percent of the purchase price.What is the EOQ,in units?

• A) 10
• B) 20
• C) 30
• D) 40
• E) 50

---

Definitions:

Coupon

The interest rate paid by fixed-income securities, typically expressed as an annual percentage of the face value.

Selling For

The process or act of offering goods or services in exchange for money.

Annually

Referring to events or measurements that occur once every year.

Indexed Bonds

The interest rate of such a bond is based on an inflation index such as the consumer price index (CPI), so the interest paid rises automatically when the inflation rate rises, thus protecting the bondholders against inflation.