$6$

$.$

$1$

$$Suppose you purchase a part from a supplier for a unit cost of $

$4$

$$with which you assemble red widgets. On average, you use

$5$

$0$

$,$

$0$

$0$

$0$

$$units of this part each year. Every time you order this particular part, you incur a sizable ordering cost of $

$8$

$0$

$0$

$$regardless of the number of parts you order. Your cost of capital is

$2$

$0$

$\%$

$$per year.