1) Eagle Corp. projects its sales to be 720,000 units this year. As a result of holding inventories, insurance, storage, taxes and other cost are incurred amounted to P2 per unit per year. P50.00 is incurred, every time Eagle Corp. makes an order, On the average it takes 7 days to make and receive an order. (Use 360 days a year). Assuming Eagle Corp.'s inventory may take as 9 days to respond: How much transaction or ordering cost are incurred each year?

a)9,000

b)6,500

c)6,000

d)7,000

2)Sonic corp. evaluation of its cash outlay required indicates that it needs P8,450 for the year. It incurs P100 to convert marketable securities to cash. The marketable securities earn an annual rate of 4%. Sonic corp. does not maintain buffer cash. How much is the annual holding cost as a result of keeping cash in bank?

a)130

b)160

c)115

d)150