A Keyboard Costs $1000, and the Annual Holding Cost Is

question 17

Multiple Choice

A keyboard costs $1000, and the annual holding cost is 25%. Annual demand is 10,000 units, and the order cost is $150 per order. What is the approximate economic order quantity?

• A) 16
• B) 70
• C) 110
• D) 183

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Definitions:

Net Profit Margin Percentage

A financial metric that shows the percentage of profit a company makes for every dollar of sales, calculated by dividing net profit by total revenue.

Average Sale Period

A financial metric measuring the average time it takes for a company's inventory to turn into sales, often seen as part of inventory turnover analysis.

Price-earnings Ratio

A valuation metric that compares a company's current share price to its per-share earnings.

Dividend Payout Ratio

A financial metric that measures the percentage of a company's earnings paid out to shareholders as dividends, indicating how much money a company returns to shareholders versus how much it keeps to reinvest.