Sloan Inc. recently invested in a project with a 3-year life span. The net present value was $9000 and annual cash inflows were $21000 for year 1; $24000 for year 2; and $27000 for year 3. The initial investment for the project, assuming a 15% required rate of return, was: Present value PV of an Annuity
Year of 1 at 15% of 1 at 15%
1 .870 .870
2 .756 1.626
3 .658 2.183
a. $45, 792.
b. $45, 180.
c. $29, 232.
d. $38, 376.

Thomas kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. thomas's fastest-moving inventory item has a demand of 6,000 units per year. the cost of each unit is $100, and the inventory carrying cost is $10 per unit per year. the average ordering cost is $30 per order. it takes about 5 days for an order to arrive, and the demand for 1 week is 120 units. (this is a corporate operation, and the are 250 working days per year.)a) what is the eoq? b) what is the average inventory if the eoq is used? c) what is the optimal number of orders per year? d) what is the optimal number of days in between any two orders? e) what is the annual cost of ordering and holding inventory? f) what is the total annual inventory cost, including cost of the 6,000 units?