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A firm uses $20,000 of an item per year. The carrying cost is 25%, the cost of ordering is $10 and the order quantity is

A firm uses $20,000 of an item per year. The carrying cost is 25%, the cost of ordering is $10 and the order

quantity is $1,000. The annual total cost of carrying plus ordering would be:

A) $500.

B) $5,000.

C) $816.

D) $2,500.

E) none of the above

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