Assume that Palmer Executive Pens uses 1,440,000 gallons of ink each year. Further, assume that Palmer can order the ink at a cost of $2 per gallon plus fixed ordering costs of $100 per order. The firm's carrying cost is 20 percent of the inventory value, at cost. What is the EOQ? * O 21,456 13,563 26,833 O 43,987 30,040

Assume that Palmer Executive Pens uses 1,440,000 gallons of ink each year. Further, assume that Palmer can order the ink at a cost of $2 per gallon plus fixed ordering costs of $100 per order. The firm's carrying cost is 20 percent of the inventory value, at cost. What is the EOQ? * O 21,456 13,563 26,833 O 43,987 30,040

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter15: Managing Short-term Assets

Section: Chapter Questions

Problem 19PROB

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Assume that Palmer Executive Pens uses 1,440,000 gallons of ink each year. Further, assume that Palmer can order the ink at a cost of $2 per gallon plus fixed ordering costs of $100 per order. The firm's carrying cost is 20% of the inventory value, at cost. What is Palmer’s minimum costs of ordering and holding inventory? a.$ 6,254 b.$10,733 c.$11,560 d.$13,563 e.$19,825 SHOW THE ANSWER AND COMPLETE SOLUTION IN A GOOD ACCOUNTING FORM
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