question on working capital

Stockholding cost is the sum of all costs related to holding the inventory – in this case there are two costs identified

Ordering cost -$20 per order
Holding cost -10% of inventory value

To calculate the annual inventory costs for 500 units:

Ordering costs will be number of orders made multiplied by $20.
Total demand is 40,000 so if we want to just order in lots of 500 we will need to make 80 orders. Therefore our ordering cost is $1600.

Holding costs will be the value of inventory multiplied by 10%.
Average inventory will be 1/2 my order size (in problems like this we normally make the assumption that sales will happen at a constant rate throughout the period in question). Thus we have on average 250 units in stock valued at $25 each (from the question) so our average value of stock is $6,250. We then multiply by 10% to get our holding cost of $625.

Therefore total inventory costs are for an order size of 500 are:
Ordering costs $1600
+
Holding costs $625
=
Inventory costs $2225

You should be able to compute the amounts for the other order sizes in the same way.

HTH