Question

Suppose that a product's value is $1000. The manufacturer experiences a holding cost of 2.5% per month. The firm ships the product across country by truck, and it arrives six days later. The shipping cost is $80 per unit. What is the holding cost on each unit shipped? (Assume 30 days per month.)

A) $0.83

B) $5.00

C) $0.07

D) $0.40

E) $150.00

Answer

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