The Federal National Mortgage Corporation recommends that you ...

[K@]

The Federal National Mortgage Corporation recommends that you total monthly debt payments, including housing expenses, not exceed
 
  A)
 
  33 to 36 percent of your gross monthly income.
  B)
 
  14 to 18 percent of your gross monthly income.
  C)
 
  46 to 50 percent of your gross monthly income.
  D)
 
  60 to 64 percent of your gross monthly income.

Question 2

A textile manufacturer has cloth that has a 14 per yard carrying cost per year. This cloth is used at a rate of
  25,000 yards per year, and ordering costs are 10 per order.
 
  a. What is the economic order quantity for this cloth?
  b. What are the annual inventory costs for this firm if it orders in this quantity?

[Carliemb17]

Answer to Question 1

A

Answer to Question 2

a. Q = 2SO
C =
2(25,000)10
14 = 189 units
b. Total costs = (Q)
2 C + ( S ) Q O
=
(189)
2 14 + (25,