[Shafiq]

Thank you Sir and sorry that I missed to post the additional information of this question.

[Shafiq]

Thank you, Sir. It is clear now.

[Shafiq]

Thank you Sir, both questions are clear now.

[Shafiq]

Thank you Sir, it is clear now, I was confused, I thought the NPV falls minus $20.

[Shafiq]

Thank you it is helpful.

[Shafiq]

The answer in the test center given $2000.

There is 4 orders each order cost $20 so Order cost 4*$20=$80

The EOQ is 400 (2*20000*20/5)^

holding cost =(400/2)*5=$1000

Total Holding cost and ordering cost = $1080

So could you please advise what I miss here and how the answer is $2000?

[Author]

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