On an Annual Requirement of 100 Items Spread Evenly Throughout

Multiple Choice

On an annual requirement of 100 items spread evenly throughout the year, any purchaser has an opportunity of buying all 100 units at a price of $100 each, or buying 10 units at a time at a price of $120. If the inventory carrying cost is 25 percent per year and assuming no ordering costs:

A) buying 100 at a time will save the company $2,500 per year.
B) buying 100 at a time will save the company $2,000 per year.
C) buying 100 at a time will save the company $1,100 a year.
D) buying 100 at a time will save the company $900 per year.
E) buying 100 at a time will save the company $200 a year.