You need to borrow $55,000 for a new car. The annual interest rate is 4%, compounded quarterly. You will be making quarterly payments for three years.

1. What is your quarterly payment?

2. How much will you owe on the loan after you make the first payment?

3. How much will you owe on the loan after you make the 2nd payment?

You plan to deposit $50,000 at the end of each year in an IRA. The bank pays 2% APR, compounded daily. How much will be in the account when you retire in 22 years?

ABC Toy Corporation can produce either toy trucks or toy cars.

Trucks sell for $5.00. Trucks have a fixed cost of $15,000 and a per unit variable cost of $3.

Cars sell for $5.00. Cars have a fixed cost of $40,000 and a per unit variable cost of $2.

Calculate the breakeven point for trucks and calculate the breakeven point for cars.

The XYZ Toy Corp. can produce either baby rattles or baby blocks.

Rattles sell for $5.00. Rattles have a fixed cost of $10,000 and a per unit variable cost of $4.00.

Blocks sell for $5.00. Blocks have a fixed cost of $25,000 and a per unit variable cost of $1.00.

Calculate the indifference point for rattles and blocks AND interpret the results.

Indifference Point is the point at which there is no preference of producing one product over other as both produce same result. So here if total of 5000 units are produced bother rattles and block will produced a loss of 5000. Above indifference point the product producing more contribution margin (Sales - Variable cost per unit) will be preferred, so above 5000 units Block will be preferred.
Orion International expects total sales of $35,000.

The selling price per unit is $10.

The ordering cost is $15 per order and the inventory cost is $3 per unit.

Please answer all of the following questions:

A. What is the EOQ?
B. How many orders will be placed per year?
C. What is the total carrying cost?
D. What is the total ordering cost?