Problem 1. (35 points) EOQ Inventory Model AURealm sells widgets and experiences a steady demand for 1,000 widgets per day. Each widget costs $15 and the delivery lead time is negligible thanks to a nearby supplier. Handling each order costs $25. Each order is delivered by a truck which costs $75. The finance manager calculated the annualized WACC (weighted average cost of capital) as 20%. The company operates 250 business days in a year. a) (2 points) What is the value of the annual flow rate of AURealm, i.e., R ? b) (1.5 points) What is the value of the setup cost per order for AURealm, i.e., K ? c) (1.5 points) What is the value of the holding cost per widget per year, i.e., h ? d) (5 points) If AURealm wants to minimize its inventory management costs, how many widgets should it order every time they place an order, i.e., EOQ=h2RK ? e) (5 points) How many orders should AURealm place in a year, i.e., frequency of orders, QR ? f) (5 points) What is the total setup costs per year for AURealm, i.e., QKR ? g) (5 points) How many widgets does AURealm carry on the average, i.e., average inventory, 2Q ? h) (5 points) What is the total holding costs per year for AURealm, i.e., 2hQ ? i) (5 points) What is the total annual cost of managing the widget inventory for AURealm, i.e., QKR+ 2hQ+cR? NOTE: SHOW ALL YOUR WORK. USE 4 DECIMAL PLACES IN ALL CALCULATIONS