Figure 8-3 Martin Company Uses 625 Units of a Part

Multiple Choice

Figure 8-3 Martin Company uses 625 units of a part each year. The cost of placing one order is $8; the cost of carrying one unit in inventory for a year is $4.
-Refer to Figure 8-3. Martin has decided to begin ordering 40 units at a time. What is the average annual carrying cost of Martin's new policy?

A) $80
B) $60
C) $160
D) $4
E) $90