Provide answer A company carries an averageannual inventory of $3 million if itestimates the cost of capital is 10%so much costs are 7% and risk callsare 6%. What does it cost per yearto carry this inventory?

Explanation of Inventory Carrying CostInventory carrying cost refers to the total cost associated…

Answered: A company carries an average annual…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 3MC

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A company carries an average annual inventory of $3 million if it estimates the cost of capital is 10% so much costs are 7% and risk calls are 6%. What does it cost per year to carry this inventory?