1. Nowlin Pipe & Steel has projected sales of 84,000 pipes this year, an ordering cost of $3 per order, and carrying costs of $1.40 per pipe. a. What is the economic ordering quantity? b. How many orders will be placed during the year? c. What will the average inventory be?
2. Tobin Supplies Company expects sales next year to be $530,000. Inventory and accounts receivable will increase $95,000 to accommodate this sales level. The company has a steady profit margin of 25 percent with a 40 percent dividend payout. How much external financing will Tobin Supplies Company have to seek?