Answer the Following Questions Using the Information Below:
Globe Inc

question 69

Multiple Choice

Answer the following questions using the information below:
Globe Inc. is a distributor of DVDs. DVD Mart is a local retail outlet which sells blank and recorded DVDs. DVD Mart purchases tapes from Globe at $25.00 per DVD; DVDs are shipped in packages of 60. Globe pays all incoming freight, and DVD Mart does not inspect the DVDs due to Globe's reputation for high quality. Annual demand is 312,000 DVDs at a rate of 6,000 DVDs per week. DVD Mart earns 15% on its cash investments. The purchase-order lead time is one week. The following cost data are available:
$\begin{array} { l } \text { Relevant ordering costs per purchase order}&\$114.50 \\ \text {arrying costs per package per year: }& \\ \text {Relevant insurance, materials handling, }& \\ \text {breakage, etc., per year }&\$4.50 \\\end{array}$

-What are the relevant total costs?

• A) $14,279
• B) $18,114
• C) $16,531
• D) $14,278

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Definitions:

Original Maturities

The initial term agreed upon at the issuance of a financial instrument or loan, before any extensions or roll-overs.

Credit Crisis

A financial situation characterized by a severe shortage of funds for lending, leading to a tightening of credit availability and often a recession.

Leveraged Bets

Investments using borrowed money to increase potential return, amplifying both potential gains and losses.

Fed Regulation

Refers to the rules and guidelines enforced by the Federal Reserve, the central bank of the United States, aimed at maintaining the stability and integrity of the financial system.