Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
The University Bookstore at a prestigious private university
buys mechanical pencils from a wholesaler. The wholesaler
offers discounts for large orders according to the following
price schedule:
The bookstore expects an annual demand of 2,500 units. It
costs $10 to place an order, and the annual cost of holding a
unit in stock is 30 percent of the unit’s price. Determine the
best order quantity
Transcribed Image Text:Order Quantity
Price per Unit
O to 200
$4.00
201 to 2,000
$3.50
2,001 or more
$3.25
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