Question a: Limassol Ltd company trades one product which has purchase price €225 per unit, its demand for the period is

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Question a: Limassol Ltd company trades one product which has
purchase price €225 per unit, its demand for the period is 100
units, the ordering cost €375 and the holding cost is 20% of the
purchase price. The supplier of the company offers 2.5 % discount
for order of 75 units, 5% discount for order of 100 units and 7.5%
discount for order of 250 units. Required: Calculate the order in
units that minimize the total cost (10 marks)
Question b: Explain the symptoms and consequences of
overcapitalization and overtrading (2 marks)
Question c: Nicosia Ltd needs €15 million in finance to be
easily spread over the coming year, which Paphos Ltd will supply.
The standing bank fee of for each transaction is €300. The interest
cost of holding cash is 9% per year. Required: Calculate how much
should Nicosia Ltd draw down at a time? (2 marks)
Question d: Describe practices to deal with liquidity problems
(2 marks