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ABC Co. sells widgets and expects annual demand of 3.4 million units. The cost of making an order is £49.71 and

the cost of holding one unit for one year is £0.50.

What is the total ordering cost per year?

Revaile Co. has annual transactions of £30 million. The fixed cost of converting securities into cash is £500 per conversion. The annual opportunity cost of funds is 6%.

What is the optimal deposit size?

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