Reference no: EM132583800

Question 1.) Avatar wishes to minimize its inventory costs. Annual demand for a raw material costing P12 per unit is 60,000 units per year. Inventory management costs for this raw material are as follows:

Ordering cost: P6 per order

Holding cost: P0.5 per unit per year

The supplier of this raw material has offered a bulk purchase discount of 1% for orders of 10,000 units or more. If bulk purchase orders are made regularly, it is expected that annual holding cost for this raw material will increase to P2 per unit per year.

What is the total inventory cost?

Question 2.) On January 1, Year 1, a 10,000,000 10% bond is issued to yield 8% interest. The principal of the bond is payable after 5 years and interest is paid at the end of each year. What is the issue price of the bond? (Use 4 decimal points for the Time value Factor)

Question 3.) How much should you deposit today in a bank to have 126,209.49 after 10 years and the bank compounds the interest at 8.8%? (Use 4 decimal points for the Time value Factor)