Exhibit 28.2 Cartwright Computing Expects to Order 126,000 Memory Chips for Inventory

question 6

Multiple Choice

Exhibit 28.2
Cartwright Computing 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 costs is equal to 20 percent of the purchase price. (Assume a 360-day year.)
-Refer to Exhibit 28.2.How many orders should Cartwright place during the year?

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

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Definitions:

Shares Issued

Refers to the total number of shares that a company has allocated to shareholders as part of its capital structure, including those owned by the public and the company itself.

Par Common Stock

The nominal or face value of a share of common stock, as stated in the corporate charter, which has minimal effect on its market value.

Market Value

The existing rate at which a service or asset is available for purchase or sale on the marketplace.

Paid-In Capital

Funds raised by a company from investors through the issuance of securities such as stocks, representing the capital contributed by shareholders in excess of the par value of the shares.