Kamber, Inc., owns a factory located close to, but not inside, a foreign trade zone. The plant imports volatile chemicals that are used in the manufacture of chemical reagents for laboratories. Each year, Kamber imports about $14,200,000 of chemi- cals subject to a 30 percent tariff when shipped into the United States. About 15 per- cent of the imported chemicals are lost through evaporation during the manufactur- ing process. In addition, Kamber has a carrying cost of 10 percent per year associated with the duty payment. On average, the chemicals are held in inventory for nine months.
Required
1. How much duty is paid annually by Kamber?
2. What is the carrying cost associated with the payment of duty?