What is the economic order quantity

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Q1. On January 7, 2021, Dang Company discounted its own P100,000, 180-day note at the Bank of the Philippine Islands at a discount rate of 20%. Dang repaid the note on the July 6, 2021, its due date. Based on a 360-day year, what was the effective rate of interest on the borrowing?

Q2. Down Under Company's budgeted sales and budgeted cost of sales for the coming year are P126 million and P72 million, respectively. Short-term interest rates are expected to average 10%. If Down Under can increase inventory turnover from its current level of nine times per year to a level of 12 times per year, its cost saving in the coming year are expected to be ________?

Q3. Ana Company sells 20,000 radios evenly throughout the year. The cost of carrying one unit of inventory for one year is P8, and the purchase order cost per order is P32. What is the economic order quantity?

Reference no: EM132938821

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