Shoe shine is a local retail shoe store located on the north side of centerville. annual demand for a popular sandal is 500 pairs, and john dirk, the owner of shoe shine, has been in the habit of ordering 100 pairs at a time. john estimates that the ordering cost is $10 per order. the cost of the sandal is $5 per pair. for john's ordering policy to be correct, what would the carrying cost as a percentage of the unit cost have to be? if the carrying cost were 10% of the cost, what would the optimal order quantity be?

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.