FNAN 522 Module 7 Homework – Complete Finance Review &
Solutions Guide (2026)
A company has a holding cost per unit of $5. Each order has a fixed cost of $8 and the annual
demand quantity is 150,000 units. What is the company's optimal order quantity? - ANS ✔✔693
units
A company that manufactures 4th of July decorations is looking to improve its inventory
management. Which of the following should it consider as it redesigns its inventory system?
a. It should analyze its cash flow so it has enough cash to purchase its stock.
b. It should review its past sales data to determine the pattern of demand for its goods.
c. All of these answers.
d. It should calculate the lag time in its supply chain. - ANS ✔✔c. All of these answers.
A company values its inventory by assuming that the most recently produced items are sold
first. This inventory valuation method is known as ___.
a. Moving Average Cost Method
b. LIFO
c. Weighted Average Cost Method
d. FIFO - ANS ✔✔LIFO
A customer has 45 days from the date of invoice to pay a bill in full, but if he pays within 15 days
of the invoice, he gets a 10% discount. Which of the following describes these terms of trade?
a. 10/15, net 45.
b. 15/45, net 10.
c. 10/45, net 15.
d. 15/10, net 45. - ANS ✔✔a. 10/15, net 45
Solutions Guide (2026)
A company has a holding cost per unit of $5. Each order has a fixed cost of $8 and the annual
demand quantity is 150,000 units. What is the company's optimal order quantity? - ANS ✔✔693
units
A company that manufactures 4th of July decorations is looking to improve its inventory
management. Which of the following should it consider as it redesigns its inventory system?
a. It should analyze its cash flow so it has enough cash to purchase its stock.
b. It should review its past sales data to determine the pattern of demand for its goods.
c. All of these answers.
d. It should calculate the lag time in its supply chain. - ANS ✔✔c. All of these answers.
A company values its inventory by assuming that the most recently produced items are sold
first. This inventory valuation method is known as ___.
a. Moving Average Cost Method
b. LIFO
c. Weighted Average Cost Method
d. FIFO - ANS ✔✔LIFO
A customer has 45 days from the date of invoice to pay a bill in full, but if he pays within 15 days
of the invoice, he gets a 10% discount. Which of the following describes these terms of trade?
a. 10/15, net 45.
b. 15/45, net 10.
c. 10/45, net 15.
d. 15/10, net 45. - ANS ✔✔a. 10/15, net 45
