A firm has used the economic order quantity (EOQ) formula to arrive at an EOQ for Component C1 of 400 units. Annual demand for Component C1 is 12,000 units and the cost of placing an order for the component is $40. What is the cost of holding one unit of Component C1 in inventory for one year?

Step-by-step explanation:

When one raises a value to an exponent, one can multiply the current value of the exponent by the number it is raised to. This is the case because raising a value to an exponent is another way of representing that value times itself the number of times that the exponent indicates. Remember, if no exponent is written, then the exponent is (1).

One can apply this here by multiplying every exponent in this problem by (5) since the fraction is raised to the power (5).

Simplify,