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An entity sells 1,500 units of a particular item each year and orders the items in equal quantities of 500 units at a price of US $5 per unit. No safety stocks are held. If the entity has a cost of capital of 12%, its annual opportunity cost of carrying inventory is:
A. US$900
B. US$150
C. US$180
D. US$300
Answer: B
Explanation:
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