Exercise.3 Daniel and Evelyn are considering buying a house valued at $250,000. They have combined savings of $20,000, and the bank approved a $200,000 second mortgage. Also, Daniel has just won $10,000 from a lottery. If Daniel and Evelyn invested their money in guaranteed certicates, they would be able to earn 4%. The interest rates offered by the bank are 6% for the first mortgage and 7% for the second. Question On the basis of the information, calculate Daniel and Evelyns cost of capital. Page 291-3 Q6. With an example, differentiate between cash flow and profite. Q19. How can accruals be a source of financing? Exercise.5 A company has decided to market its products more aggressively. Current sales are 30,000 units per year, and they are expected to increase by 50% next year. Carrying costs are estimated at $0.20 per unit, and order costs are estimated at $7.00. The firm wants to minimize its inventory costs. Questions 1. What is the economic ordering quantity? 2. What is the optimal number of orders per month once the new sales level is reached