1.Last year BMT Corporation earned $20 million, and paid $8 million in dividends. The company follows a constant payout ratio dividend policy. If the company wants to pay $10 million in dividends next year, how much must BMT earn?

2.AWM sells 291,600 units of product annually. The optimal safety stock is 500 units. Each units costs AWM $3, carrying costs are 30%, and the cost of placing an order with the supplier is $20.

a) Compute the EOQ.

b) Compute the total inventory costs at the EOQ level.