Suppose that a company needs 1,500,000 items during a year and that preparation for each production run costs $900. Suppose also that it costs $22 to produce each item and $3 per year to store an item. Use the inventory cost model to find the number of items in each production run so that the total costs of production and storage are minimized.

On january 1, year 1, purl corp. purchased as a long-term investment $500,000 face amount of shaw, inc.’s 8% bonds for $456,200. the bonds were purchased to yield 10% interest. the bonds mature on january 1, year 6, and pay interest annually on january 1. purl uses the effective interest method of amortization. what amount (rounded to nearest $100) should purl report on its december 31, year 2, balance sheet for these held-to-maturity bonds?