Part of your business is selling modems for network connection. Demand for modems in your store is about 8,000 units per year. Ordering a shipment of modems costs about $500 in processing. A modem costs you $150 and holding a modem in inventory costs you 12% of its cost per year.

Now assume that the supplier gives you the following discount schedule:

0-499 $150

500-999 $149

1000-1999 $148

2000-4999 $147

5000- $146

 What is the annual cost, for this quantity, of purchasing the modems?