Estimation for the inventory holding cost rate, Mokia currently does not have an accurate estimate for its inventory holding cost rate. However, the management thinks that the following historical data collected from one of their warehouses can be helpful to and representative for all storage locations. The company has built a warehouse to store components that feed the assembly lines about three years ago at a total cost of € 150,000. This construction was financed through a 9% mortgage and was to be depreciated on a 15-year basis. This warehouse accommodates about 80000 SKUs valued at € 600,000 by the accounting department. This cost includes only labor and material-related cost components. The main operating costs per year in this warehouse were estimated to be as follows: Municipal and other taxes: € 5600 Insurance on building and contents: € 2550 Heating/Air Conditioning: € 21500 Electricity and Water: € 3000 Labor (supervisor, three clerks, a half time janitor): € 85000 Pilferage: € 5000 Obsolescence: € 5000 The company's credit rating given by its financial institutions is sound. The managers are confident that their financial institution can value their capital investment at about 12%.