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Fanatics is spending $3.50 each to manufacture 100,000 jerseys in preparation for the upcoming World Series. They took out a loan at 4.5% in order
Fanatics is spending $3.50 each to manufacture 100,000 jerseys in preparation for the upcoming World Series. They took out a loan at 4.5% in order to have the funds needed to manufacture these jerseys. They also pay $5,000 in warehouse rent, $1,000 in inventory insurance, and expect $600 worth of inventory to be damaged. Assume that Fanatics DOES receive the income deduction tax break for interest payments, and is taxed at the 40% corporate tax rate. It took Fanatics 5 orders to receive all the materials needed to produce their 100,000 jerseys, and each order cost them $1,000 in shipping and handling. Find the C value in our total carrying cost formula
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