Cindy's Toys has an average cash balance of $18,000 (=C/2) opportunity cost of carrying cash is 5%. Cindy replenishes with $36,000 (=C ) on the first of each month and the order cost is $25 (So, total cash needs for the year = C x 12 = 432000)

(i) What are the total carrying (opportunity) costs under the current system?

(ii) What are the total replenishment costs under the current system (C)?

(iii) The firm is not replenishing cash balances optimally. Find the firms optimal cash replenishment amount(C*).

(iv) What are the costs savings (i.e. the difference between the total (carrying and

replenishing) costs using the current system and total costs using C* (( versus C)?

(v) When the firm replenishes cash optimally, how many times a year would it replenish? How frequently would it replenish (every 20 days, or 30 days, etc.)?

must answer all questions, thank you!