On an annual requirement of 100 items spread evenly throughout the year, any purchaser has an opportunity of buying all 100 units at a price of $100 each, or buying 10 units at a time at a price of $150. If the inventory carrying cost is 25 percent per year and assuming no ordering costs:

Multiple Choice

buying 10 at a time will save the company $5,000 per year.

buying 10 at a time will save the company $3,875 per year.

buying 100 at a time will save the company $3,937.50 per year.

buying 100 at a time will save the company $4,125 per year.

buying 100 at a time will save the company $6,250 per year.