Holding costs are $35 per unit per year, the ordering cost is $120 per order, and sales are relatively constant at 300 per month. (a) What is the optimal order quantity? (b) What are the annual holding and setup costs?

Kaplan Corp. is evaluating the purchase of a small firm, Pahl Inc., which manufactures ornamental gadgets, products involving advanced technology. These products are expected to revolutionize the home construction industry. Pahl has only a minor share of this growing market, but the market is expected to grow rapidly. In which of the following categories of business in the BCG matrix would this firm be placed?

A. cash cows B. stars C. spinoffs D. question marks E. dogs

A stationery company plans to launch a new type of indelible ink pen. Advertising for the new product will be heavy and will cost the company $8 million,

although the company expects general revenues of $280 million next year from sources other than sales of the new pen. If the company has a corporate tax-rate of 35% on its pretax income, what effect will the advertising for the new pen have on its taxes? A) It will increase taxes by $8 million. B) It will increase taxes by $2.8 million. C) It will have no effect on taxes. D) It will reduce taxes by $2.8 million.