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50. At the optimal order quantity size, the: A. B. C. D. E. Total cost of holding inventory is fully offset by the restocking (ordering)
50. At the optimal order quantity size, the: A. B. C. D. E. Total cost of holding inventory is fully offset by the restocking (ordering) costs. Carrying costs are equal to zero. Restocking (ordering) costs are equal to zero. Total costs equal the carrying costs. Carrying costs equal the restocking (ordering) costs. 81. Your current sales consist of 45 units per month at a price of $225.60 a unit. You are weighing the pros and cons of switching to a net 30 credit policy from your current cash only policy. If you decide to switch your credit policy you also plan to increase the sales price to $240 a unit. If you make the switch you do not expect your total monthly sales quantity to change but you do expect a 2 percent default rate. The monthly interest rate is 1.2 percent. What is the net present value of the proposed credit policy switch? A. $26,727 B. $26,893 C. $27,965 D. $25,848 E. $29,481 34. Which one of these statements is correct? A firm's cash cycle generally decreases when a firm switches from a cash to a credit policy, all else equal. Most customers will forgo the discount and pay at the end of the credit period. Total revenues generally decrease if both the quantity sold and the price per unit increase when credit is granted. Only the cost of default should be considered before granting credit A firm may have to increase its long-term borrowing if it decides to grant credit to its customers A. B. C. D. E. 24.Which one of the following statements is correct? A. The credit period begins when the discount period ends. B. The discount period is the length of time granted to a customer to pay for a purchase. C. The credit period begins on the invoice date. D. With terms of 2/10, net 30, the net credit period is 20 days. E. With EOM dating, all sales are assumed to have occurred on the 15th of each month
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