TRUE OR FALSE.

1. The optimal cash balance is the tradeoff between opportunity cost or cost of borrowing or holding cash and the transaction cost.
2. Economic Order Quantity (EOQ) in inventory management involves tradeoff between carrying costs and ordering cost.

3) The total costs of cash balances are:

A. Variable costs ang fixed costs

B. Carrying costs and ordering costs

C. Holding costs and transaction costs

D. None of the above

4)The economic order quantity formula assumes that

A. Periodic demand for the good is known.

B. Carrying cost per unit vary with quantity ordered.

C. Costs of placing an order vary with quantity ordered.

D. purchase costs per unit differ due to quantity discounts.

5) Inventory costs are:

A. Holding costs and transaction costs

B. Carrying costs and ordering costs

C. Variable costs ang fixed costs

D. None of the above