Sir,
If cost of capital is given (say 10%)
Then in denominator of EOQ formula
should I include the cost
(say purchase price= 500)
So would Ch = $ 5 + Storage cost.
Ask the Tutor ACCA FM
EOQ(Cost of holding)
4y ago#1You would include it (although using your figures it would not be $5, it would be 10% x $500 = $50).
Oops! Yes it should have been $ 50..
Thank you sir. :-)
4y ago#3You are welcome :-)
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