This question is based on t he following information: B Hon Company purchases thermostats and use them in heating units it manufactures. Annual requirement for the thermostat is 2,000 units. The cost per thermostat is P 20. The cost of placing a single order is P 50 while the cost of storage is 25% of the average inventory value. The suppler of the thermostat offers a discount of 2% if the company will order in lots of 500 units. 1. How much would be the total costs associated with the inventory if the company adopts the discounted ordering policy? . A. P 40,000 B. P 40,625 C. P 41,000 D. P 42,000
This question is based on t he following information: B Hon Company purchases thermostats and use them in heating units it manufactures. Annual requirement for the thermostat is 2,000 units. The cost per thermostat is P 20. The cost of placing a single order is P 50 while the cost of storage is 25% of the average inventory value. The suppler of the thermostat offers a discount of 2% if the company will order in lots of 500 units.
1. How much would be the total costs associated with the inventory if the company adopts the discounted ordering policy?
. A. P 40,000
B. P 40,625
C. P 41,000
D. P 42,000
2. How much is the net cash flow net of income taxes for the 3rd year?
A. 17,268
B. 22,000
C. 22,994
D. 30,618
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