Answer:
The answer is quantified and measurable.
Explanation:
Goals need to be quantified and measurable in effective marketing planning. To determine what needs to be accomplished and when, we must put figures to it. This makes performance measurement easier where variances at the end can be analysed.
For example, one of the marketing goals for bank A might be to onboard 100 new customers every month for a year after the launching of its new mobile app.
This example is quantified and can be measured every month.
Rule 103 of Regulation M requires that a market maker in a stock that is also a syndicate member in an "add-on" offering of that issue, during the 20-day cooling off period:__________
The available options are:
A. can only place a stabilizing bid at, or below the Public Offering Price
B. can only position trade the stock
C. cannot fill any orders for that security
D. can either resign as a market maker or can act as a passive market maker
Answer:
can either resign as a market maker or can act as a passive market maker
Explanation:
Rule 103 of Regulation which deals with Limits On Syndicate Members who are Market Makers requires that a market maker in a stock that is also a syndicate member in an "add-on" offering of that issue, during the 20-day cooling off period "can either resign as a market maker or can act as a passive market maker."
Hence, in this case, the correct answer is "can either resign as a market maker or can act as a passive market maker."
On July 1, 2017, Lopez Company paid $1,400 for six months of insurance coverage. No adjustments have been made to the Prepaid Insurance account, and it is now December 31, 2017. Zim Company has a Supplies account balance of $5,400 on January 1, 2017. During 2017, it purchased $2,200 of supplies. As of December 31, 2017, a supplies inventory shows $900 of supplies available. Prepare the journal entries to reflect expiration of the insurance and correctly report the balance of the Supplies account and the Supplies Expense account as of December 31, 2017.
Answer:
Lopez Company
the journal entries to record prepaid insurance:
July 1, 2017, 6 months of insurance are prepaid
Dr Prepaid insurance 1,400
Cr Cash 1,400
the adjusting entry made on December 31 to record insurance expense:
December 31, 2017, insurance expense
Dr Insurance expense 1,400
Cr prepaid insurance 1,400
Zim Company
supplies account initial balance $5,400
then it purchased $2,200 worth of supplies during the year
final account balance $900
supplies expense = $5,400 + $2,200 - $900 = $6,700
Adjusting journal entry:
December 31, 2017, supplies expense
Dr Supplies expense 6,700
Cr Supplies 6,700
Ending balances:
Supplies expense account $6,700Supplies account $900Your estimate of the market risk premium is %. The risk-free rate of return is %, and General Motors has a beta of . According to the Capital Asset Pricing Model (CAPM), what is its expected return?
Answer:
The correct option is option A) 16.4%.
Explanation:
Note: This question is not complete as all the important data are omitted from it. The complete question is therefore provided before answering the question as follows:
Your estimate of the market risk premium is 9%. The risk-free rate of return is 3.8% and General Motors has a beta of 1.4. According to the Capital Asset Pricing Model (CAPM), what is its expected return?
Options:
A) 16.4%
B) 17.2%
C) 14.8%
D) 15.6%
The question is now answered as followed:
Capital asset pricing model (CAPM) can be described as a model that is employed to compute a theoretical required rate of an asset in order decide whether or not to add assets a portfolio of investment that is well-diversified.
According to the Capital Asset Pricing Model (CAPM), the expected return can be calculated using the following formula:
Expected return = Risk-free rate + (Beta * Market ris premium) .......... (1)
Where;
Risk-free rate of return = 3.8%
Market risk premium = 9%
Beta = 1.4
Substitute the values into equation (1), we have:
Expected return = 3.8% + (1.4 * 9%) = 16.40%
Therefore, the correct option is option A) 16.4%.
Parwin Corporation plans to sell 40,000 units during August. If the company has 16,500 units on hand at the start of the month, and plans to have 17,500 units on hand at the end of the month, how many units must be produced during the month?
Answer:
41,000 units
Explanation:
The computation of units must be produced during the month is shown below:-
Units Produced = Units at Year End - Units at beginning + Units Sold
= 17,500 units - 16,500 units + 40,000 units
= 57,500 units - 16,500 units
= 41,000 units
Therefore for computing the units produced during the month we simply applied the above formula.
The company must produce 41000 units during the month. The entire cost of direct materials and labor as well as the total cost of manufacturing overhead may be added together to get the overall cost of the product.
Below is a calculation of the number of units that must be generated during the month:-
Units Produced = Units at Year's End - Units at Start + Units Sold
40,000 units + 17,500 units less than 16,500 units.
16,500 units less than 57,500 units
= 41,000 units
Therefore, we used the aforementioned calculation to calculate the number of units generated throughout the month.
All of the direct and indirect expenses firms incur when producing a good or rendering service are referred to as production costs. Various expenditures, including labor, raw materials, consumable manufacturing supplies, and general overhead, might be included in production costs.
Various expenditures, including labor, raw materials, consumable manufacturing supplies, and general overhead, might be included in production costs.
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3. At an oral auction for a lamp, half of all bidders have a value of $50 and half have a value of $70. What is the expected winning bid if there are four bidders
Answer: $60
Explanation:
From the question, we are informed that At an oral auction for a lamp, half of all bidders have a value of $50 and half have a value of $70.
The expected winning bid if there are four bidders goes thus:
Since there are four bidders, the probability that the winning bid is $50 is 1/2 and for $70, it's 1/2 as well based on the question.
The expected winning bid will now be:
= ($50 × 1/2) + ($70 × 1/2)
= ($50 × 0.5) + ($70 × 0.5)
= $25 + $35
= $60
The difference between total sales revenue and total cost of goods sold is the: A. Trade margin B. Gross marketing contribution C. Net marketing contribution D. All of the above
Answer:
A. Trade margin
Explanation:
The profit obtained from trading operations is known as gross profit or trade margin.This is calculated as sales less costs of goods sold.
The difference between total sales revenue and total cost of goods sold is the gross marketing contribution.
The following information is considered:
When the cost of goods sold is deducted from the sales revenue so the gross marketing contribution should come. Neither it is trade margin, nor net marketing contribution.In other words, the difference is called as gross margin.Therefore we can conclude that the correct option is B.
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pryor frosted flakes company offers its customers a pottery cereal bowl if they send in 4 boxtops from flakes boxes and $1.00. The company estimates that 60% of the boxtops will be redeemed. In 2007, the company sold 500,000 boxes and costumers redeemed 220,000 boxtops receiving 55,000 bowls. if the bowls cost 2.50 each, how much liabilitiy for outstanding premiums should be recorded at the end od 2007?
Answer: $30,000
Explanation:
Company estimates that 60% of boxtops will be redeemed.
They sold 500,000 boxes
= 500,000 * 60%
= 300,000 boxtops will be sent in.
So far, 220,000 have been sent in. How many left;
= 300,000 - 220,000
= 80,000 boxtops are still to be sent in
4 boxtops are needed to receive a pottery bowl so with 80,000;
= 80,000/4
= 20,000 pottery bowls are due to be issued.
Each bowl costs $2.50 to make. Customers will send in $1 however so effectively it will cost the company;
= 2.50 - 1
= $1.50
With 20,000 still left to be issued, each costing $1.50, the total liabilitiy for outstanding premiums to be recorded at the end of 2007 is;
= 20,000 * 1.5
= $30,000
If an investor buys enough stocks, he or she can, through diversification, eliminate all of the unique risk inherent in owning stocks, but as a general rule it will not be possible to eliminate all systemic risk.
A. True
B. False
Answer: True
Explanation:
Buying enough negatively correlated stock can indeed help in diversification of a Portfolio and this on its own is very important as it reduces risk. The type of risk that it reduces however is Unsystematic risk. This is the unique risk inherent in owing stocks.
Systematic risk which is also called undiversifiable risk however cannot be so easily eliminated. This risk is inherent in the Market or the Market segment in question and results from a mix of the Economic, Geo-political and Financial factors in the market. As such, it will not be possible to eliminate all systematic risk.
You own 10,000 shares of Microsoft stock. A good way to hedge the risk involved in owning this stock would be to buy some call options on Microsoft stock.
a. True
b. False
Answer: False
Explanation:
If you want to hedge the risk of owning the stock then that would mean that you want to take measures to ensure that you don't lose out if prices fall.
A call option is not the way to do this because call options are bought with the expectations that prices will go up. If you buy call options then and the prices fall, you would make a loss on both the call options and the stock that you own.
A good way to hedge this would be to take Put options on the stock. Put options help you benefit if prices fall because you would be allowed to sell at a certain price unaffected by the fall in prices.
Your supervisor instructs you to purchase 480 pens and 6 staplers for the workplace. Pens are purchased in sets of 6 for $2.45. Staplers are sold in sets of 2 for $14.95. How much will the purchase of these products cost?
Answer:
Total cost= $225.9
Explanation:
Giving the following information:
Your supervisor instructs you to purchase 480 pens and 6 staplers for the workplace.
Pens are purchased in sets of 6 for $2.45.
Staplers are sold in sets of 2 for $14.95.
First, we need to calculate the number of "packs" to buy:
Pens= 480/6= 80
Staplers= 6/2= 3
Total cost= 80*2.45 + 2*14.95= $225.9
When working on a reconciliation, the Reconciliation screen has all the transaction data you need. On the Reconciliation screen, by default, the list of transactions hides transactions that occur after the statement end date. To show all transactions _______________________________ or select the Clear filter/View all link in this same area to remove all filters. Which option below would correctly fill the space above? A) "Statement ending date filter" in the upper left corner of the transaction list B) "Statement ending date filter" at the right side of the transaction listC) "Statement ending date filter" in the upper left corner of the transaction list D) Statement ending date filter in the upper left corner of the transaction list
Answer:
Correct Answer:
B) "Statement ending date filter" at the right side of the transaction list
Explanation:
The above option was the one that would enable someone to show all transactions when the person is working on a business reconcillation account of an organization.
Zhao Co. has fixed costs of $286,200. Its single product sells for $163 per unit, and variable costs are $110 per unit. Compute the level of sales in units needed to produce a target (pretax) income of $106,000.
Answer:
Break-even point in units= 7,400 units
Explanation:
Giving the following information:
Fixed costs= $286,200
Selling price= $163 per unit
Unitary variable costs= $110
Desired profit= $106,000
To calculate the number of units to be sold, we need to use the break-even point formula:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (286,200 + 106,000) / (163 - 110)
Break-even point in units= 7,400 units
Which of the following statements is false?
A) All of the governmental funds use the modified accrual basis of accounting.
B) Debt service funds are required to report accrued interest payable.
C) General fixed assets that are acquired with governmental fund resources are recorded as expenditures in the governmental funds but are displayed as capital assets in the governmental-wide financial statements.
D) Permanent funds reflect resources that are legally restricted so that principal may not be expended and earnings are used to benefit the government or its citizenry.
Answer: Debt service funds are required to report accrued interest payable.
Explanation:
The modified accrual basis of accounting is utilized for governmental funds. It should also be noted that permanent funds reflect resources that are legally restricted so that principal may not be expended and earnings are used to benefit the government or its citizenry.
Therefore, the option that debt service funds are required to report accrued interest payable is not true.
Baldwin has negotiated a new labor contract for the next round that will affect the cost for their product Buzz. Labor costs will go from $2.10 to $2.60 per unit. In addition, their material costs have fallen from $6.82 to $5.82. Assume all period costs as reported on Baldwin's Income Statement remain the same. If Baldwin were to pass on half the new costs of labor and half the savings in materials to customers by adjusting the price of their product, how many units of product Buzz would need to be sold next round to break even on the product
Answer:
433 units
Explanation:
Information related to production costs are missing, so I looked for it. I found the following:
current sales price = $17
current fixed costs = $7,242
new labor costs per unit = $2.60, which results in a $0.50 increase
new direct materials cost per unit = $5.82, which results in a $1 decrease
total variable costs per unit = $8.42
Baldwin plans to pass 50% of the changes in costs to its customers:
Increase $0.25 due to higher labor costsdecrease $0.50 due to lower materials costsnet change = -$0.25new sales price = $17 - $0.25 = $16.75
contribution margin per unit = $16.75 - $8.42 = $8.33
break even point in units = total fixed costs / contribution margin per unit = $7,242 / $16.75 = 432.36 = 433 units
This is where what I call a deviant comes in. Every team needs a deviant, someone who can help the team by challenging the tendency to want too much homogeneity, which can stifle creativity and learning. Deviants are the ones who stand back and say, ‘Well, wait a minute, why are we even doing this at all? What if we looked at the thing backwards or turned it inside out?’ That’s when people say, ‘Oh, no, no, no, that’s ridiculous,’ and so the discussion about what’s ridiculous comes up. Unlike the CFO I mentioned before, who derailed the team by shutting down discussions, the deviant opens up more ideas, and that gets you a lot more originality. In our research, we’ve looked carefully at both teams that produced something original and those that were merely average, where nothing really sparkled. It turned out that the teams with deviants outperformed teams without them. In many cases, deviant thinking is a source of great innovation."According to Hackman, a deviant may help a group consider _______, but if the deviant has a strong personality and limits the input of others, the problem of ________ , may arise.
Answer:
According to Hackman, a deviant may help a group consider out-of-box thinking, but if the deviant has a strong personality and limits the input of others, the problem of complacency, may arise.
Explanation:
It's from the book "Leading Teams" of J. Richard Hackman, the Edgar Pierce Professor of Social and Organizational Psychology at Harvard University and a leading expert on teams.
The following labor standards have been established for a particular product: Standard labor-hours per unit of output 9.8 hours Standard labor rate $13.60 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 7,600 hours Actual total labor cost $100,320 Actual output 950 units What is the labor efficiency variance for the month?
Answer:
the labor efficiency variance for the month is $23,256 Favorable.
Explanation:
Labor efficiency variance = (Aq × SP) - (Sq × Sp)
= (7,600 × $13.60) - ((950 × 9.8) × $13.60)
= (7,600 × $13.60) - (9.310 × $13.60)
= $23,256 Favorable
GDP can be calculated by summing _____. rev: 04_09_2018 Multiple Choice consumption, investment, government purchases, and net exports consumption, investment, government purchases, and imports consumption, investment, wages, and rents consumption, investment, government purchases, exports, and imports
Answer:
consumption, investment, government purchases, and net exports
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
Imports is subtracted from GDP and not added
Simon Company’s year-end balance sheets follow.
At December 31 2017 2016 2015
Assets
Cash $26,403 $29,364 $29,991
Accounts receivable, net 73,552 52,436 40,392
Merchandise inventory 96,214 70,676 43,017
Prepaid expenses 8,255 7,944 3,467
Plant assets, net 230,047 214,124 189,133
Total assets $434,471 $374,544 $306,000
Liabilities and Equity
Accounts payable $107,101 $64,564 $40,392
Long-term notes payable secured by
mortgages on plant assets 82,497 84,422 66,273
Common stock, $10 par value 162,500 162,500 162,500
Retained earnings 82,373 63,058 36,835
Total liabilities and equity $434,471 $374,544 $306,000
Required:
a. Compute the current ratio for the year ended 2017, 2016, and 2015.
b. Compute the acid-test ratio for the year ended 2017, 2016, and 2015.
Answer:
A.Current ratio
2017 191%
2016 248%
2015 289%
B.Acid Test Ratio
2017 101%
2016 139%
2015 183%
Explanation:
A.Computation of the current ratio for the year ended 2017, 2016, and 2015.
Using this formula
Current Ratio =Current Assets / Current Liabilities
2017 2016 2015
Cash $26,403 $29,364 $29,991
Accounts receivable, net
73,552 52,436 40,392
Merchandise inventory 96,214 70,676 43,017
Prepaid expenses 8,255 7,944 3,467
a.Current asset
204,424 160,420 116,867
b.Current Liabilities
Accounts payable $107,101 $64,564 $40,392
Let plug in the formula
(a) / (b) Current Ratio 191% 248% 289%
Therefore the Current ratio are:
2017 191%
2016 248%
2015 289%
B.Computation for acid-test ratio for the year ended 2017, 2016, and 2015.
Using this formula
Acid Test Ratio=Current Assets / Current Liabilities
2017 2016 2015
Cash $26,403 $29,364 $29,991
Accounts receivable, net
73,552 52,436 40,392
Prepaid expenses 8,255 7,944 3,467
a. Current asset
108,210 89,744 73,850
b. Current liabilities
Accounts payable $107,101 $64,564 $40,392
Let plug in the formula
(a) / (b)Acid Test Ratio 101% 139% 183%
Therefore the Acid Test Ratio are:
2017 101%
2016 139%
2015 183%
Millie withdraws $1,000 from her checking account so she can have $1,000 in cash. If no other changes occur, M1 will
Answer:
M1 will not change
Explanation:
M1 is the money supply that is composed of physical currency , coin, demand deposits, travellers' checks, checking accounts, and negotiable order of withdrawal (NOW) accounts. M1 includes the most liquid of money supply.
Because checking account and cash are both components of M1, there would be no change in M1
During the current year, Chudrick Corporation expects to produce 10,000 units and has budgeted the following: net income $300,000, variable costs $1,100,000, and fixed costs $100,000. It has invested assets of $1,500,000. The company’s budgeted ROI was 20%. What was its budgeted markup percentage using a full-cost approach?
Answer:
25%
Explanation:
For the computation of budgeted markup percentage using a full-cost approach first we need to find out the profit expected and total cost which is shown below:-
Profit Expected = $1,500,000 × 20%
= $300,000
Total cost = Variable cost + Fixed cost
= $1,100,000 + $100,000
= $12,00,000
Budgeted Markup Percentage = Profit ÷ Total Cost
= $300,000 ÷ $12,00,000
= 25%
Suppose the exchange rate is 90 yen per U.S. dollar and the United States wants to keep the exchange rate at a target rate of 90 yen per U.S. dollar. If the demand for U.S. dollars decrease, the Fed ______
A. buys dollars to raise the exchange rate
B. sells dollars to raise the exchange rate
C. sells dollars to lower the exchange rate
D. buys dollars to lower the exchange rate
Answer:
Option A, buys dollars to raise the exchange rate, is the right answer.
Explanation:
Option A is correct because when the Fed will buy the dollars then only the demand for dollars will shift rightwards. Consequently, the dollar price or exchange rate will go up. Therefore, the Fed will buy the dollars to increase the exchange rate. In another case, if the Fed wants to decrease the exchange rate then it will sell the dollars, and selling of dollars will shift the supply rightwards. Thus, the exchange rate will fall.
The value of the currency of a country as contrasted to the other country or the economic region is called an exchange rate.
The correct answer is:
Option A. buys dollars to raise the exchange rate.
This can be explained as:
When Fed will purchase a dollar then, there will be shifts towards the right.The transfer rate or the dollar price will rise.So to enhance the economic measure dollar should be purchased.To reduce the exchange rate dollar should be sold.Therefore, Fed should buy dollars.
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Cole Co. began constructing a building for its own use in January 2016. During 2016, Cole incurred interest of $50,000 on specific construction debt, and $20,000 on other borrowings. Interest computed on the weighted-average amount of accumulated expenditures for the building during 2016 was $40,000. What amount of interest should Cole capitalize?
Answer:
$40,000
Explanation:
The accounting procedure involved in the above is that one picks the lower between the actual interest incurred and the interest computed on the weighted average amount of accumulated expenditures for PPE.
The actual interest incurred on specific construction debt and other borrowings
= $50,000 + $20,000
= $70,000
Since the interest computed on the weighted average amount of accumulated expenditure for the building is $40,000 , the lower between the actual interest incurred and interest on weighted average amount of accumulated expenditure is $40,000, hence will be the capitalized amount.
Tom and Jerry's has 2.4 million shares of common stock outstanding, 2.4 million shares of preferred stock outstanding, and 14.00 thousand bonds. If the common shares are selling for $13.40 per share, the preferred share are selling for $10.40 per share, and the bonds are selling for 99.96 percent of par, what would be the weight used for common stock in the computation of Tom and Jerry's WACC
Answer:
Tom and Jerry's
The weight used for common stock in the computation of Tom and Jerry's WACC is:
= 45.22%
Explanation:
a) Data and Calculations:
Common Preferred Bonds
Stock Stock
Outstanding number 2.4 m 2.4 m 14,000
Market price per share $13.40 $10.40 $999.6
Total value $32.16 m $24.96 m $13,994,400
Total value of stock and bonds = $71,114,400
Weight of common stock = $32.16/$71.1144 * 100 = 45.22%
what is the price of a 5 year bond that has a coupon rate of 7% with each coupon paid semi annually. The current market rate is 6%. Assume a par value of 1000
Answer:
The answer is $1,042.65
Explanation:
Coupon payment being done semiannually means it is paid twice in a year
N(Number of periods) = 10 periods ( 5 years x 2)
I/Y(Yield to maturity) = 3 percent( 6 percent ÷ 2)
PV(present value or market price) = ?
PMT( coupon payment) = $35 ( [7 percent÷ 2] x $1,000)
FV( Future value or par value) = $1,000.
We are using a Financial calculator for this.
N= 10; I/Y = 3; PMT = 35; FV= $1,000; CPT PV= -1,042.65
Therefore, the market price of the bond is $1,042.65
On July 1, Wildhorse Co. purchases 560 shares of its $5 par value common stock for the treasury at a cash price of $10 per share. On September 1, it sells 370 shares of the treasury stock for cash at $11 per share. Required:Journalize the two treasury stock transactions.
Answer:
Please see the journal entries for the two treasury stock transactions.
Explanation:
• Purchase of treasury stock
Treasury stock Dr $5,600
To Cash account Cr $5,600
(Being the purchase of treasury stock that is recorded)
For recording the above, treasury stock was debited because it increased the treasury while cash credited because it decreased the assets.
• Sale of treasury stock
Cash account Dr $4,070
To Treasury stock Cr $3,700
To paid in capital- treasury stock Cr $370
Explanation
° Purchase of treasury stock
Treasury stock
= 560 shares × $10 per share
= $5,600
° Sales of treasury stock
Cash receipt
= 370 shares × $11 per share
= $4,070
Treasury stock
= 370 shares × $10 per share
= $3,700
Paid in capital treasury stock
= 370 shares × ($11-$10)
= $370
Imagine that you are the supply chain manager for the Magic Widget company and you need to measure your supply chain performance. The chart shows the financial variables that you will need to perform your task.
Financial Variables
Total Assets (in $ billions) 15.1
Cost of Goods Sold (in $ billions) 14.3
Inventory:
Raw Material Inventory (in $ billions) 0.76
Work-in-progress Inventory (in $ billions) 0.12
Finished Goods Inventory (in $ billions) 0.82
Compute the percentage of assets committed to inventory and inventory turnover.
Answer:
Percentage of assets in inventory = 11.26%
Inventory turnover = 8.41 times
Explanation:
The computation of the percentage of assets committed to inventory and inventory turnover is shown below:-
Total inventory = Raw material + Work in progress + Finished goods inventory
= $0.76 billion + $0.12 billion + $0.82 billion
= $1.7 billion
Percentage of assets in inventory = Total inventory ÷ Total assets
= $1.7 ÷ $15.1
= 11.26%
Inventory turnover = Cost of goods sold ÷ Total inventory
= $14.3 ÷ $1.7
= 8.41 times
If a firm is producing so that the point chosen along the production possibility frontier is socially preferred, then that firm is said to have reached its:________
a. allocative efficiency
b. productive efficiency
c. utility-maximizing efficiency
d. minimum price efficiency
Answer:
b
Explanation:
Productive efficiency means that production is been carried out with no waste.
Production possibility frontier is a curve that shows the various combinations of goods that can be produced in an economy when all resources are fully utilised.
On the ppf, all resources are fully utilised, so there is productive efficiency.
Evaluate the Ritz-Carlton business model and associate key quality characteristics in the operations of a hotel set-up process.
Answer:
Ritz Carlton is luxury hotel chain of America. The company has 101 luxury hotel in more than 30 countries of the world. The success of Ritz Carlton is mainly because they keep the comfort of their guests as their highest priority. Their mission statement clearly states that comfort and genuine care of their guests is utmost important to them.
Explanation:
Their business model focuses entirely on their customers. Ritz Carlton has created its leading brand by providing great ambiance to the visitors and its guest. One can dream of staying at such luxury hotel. They are famous for their hospitality of their guests. The hotel management believes on total quality management. It has set highest standard for themselves and strive to meet them by providing better and better service to its guests.
A mail-order house uses 18,000 boxes a year. Carrying costs are 60 cents per box a year, and ordering costs are $96. The following price schedule applies.
Determine:
A. The optimal order quantity.
B. The number of orders per year.
of boxes: 1,000-1,999 Price per box: $1.25
of boxes: 2,000- 4,999 Price per box: $1.20
of boxes: 5,000- 9,999 Price per box : $1.15
of boxes: 10,000 or more Price per box : $1.10
Answer:
Explanation:
Given that:
A mail-order house uses 18,000 boxes a year.
Carrying costs are 60 cents per box a year =$0.60
and ordering costs are $96.
Determine:
A. The optimal order quantity.
The optimal order quantity can be calculated by using the formula:
[tex]Q_o = \sqrt{\dfrac{2DS}{H}}[/tex]
[tex]Q_o = \sqrt{\dfrac{2*18000*96}{0.60}}[/tex]
[tex]Q_o = \sqrt{\dfrac{3456000}{0.60}}[/tex]
[tex]Q_o = \sqrt{5760000}[/tex]
[tex]Q_o = 2400 \ boxes[/tex]
B. The number of orders per year.
of boxes: 1,000-1,999 Price per box: $1.25
of boxes: 2,000- 4,999 Price per box: $1.20
of boxes: 5,000- 9,999 Price per box : $1.15
of boxes: 10,000 or more Price per box : $1.10
SInce 2400 boxes lies within ''of boxes: 2,000- 4,999 Price per box: $1.20 ''
Total cost = Carrying cost + ordering cost + Purchasing cost
[tex]Total \ cost =(\dfrac{Q}{2} )H +(\dfrac{D}{Q}) S+PD[/tex]
[tex]Total \ cost =(\dfrac{2400}{2} )0.60 +(\dfrac{18000}{2400}) 96+1.20*18000[/tex]
Total cost = ( 1200) 0.60 + 7.5(96) + 1.20(18000)
Total cost = 720 + 720 + 21600
Total cost = $ 23040
If the order size is 5000, the price per box will be 1.15
[tex]Total \ cost =(\dfrac{Q}{2} )H +(\dfrac{D}{Q}) S+PD[/tex]
[tex]Total \ cost =(\dfrac{5000}{2} )0.60 +(\dfrac{18000}{5000}) 96+1.15*18000[/tex]
Total cost = 2500 (0.60) + 3.6 (96) + 20700
Total cost = 1500 + 345.6 + 20700
Total cost = $22545.6
If the order size is 10000 , the price per box will be 1.10
[tex]Total \ cost =(\dfrac{Q}{2} )H +(\dfrac{D}{Q}) S+PD[/tex]
[tex]Total \ cost =(\dfrac{10000}{2} )0.60 +(\dfrac{18000}{10000}) 96+1.10*18000[/tex]
Total cost = 5000 (0.60) + 1.8(96) + 19800
Total cost = 3000 + 172.8 + 19800
Total cost = $22972.8
From the three total cost, the least minimum cost of ordering is: 5000
So; the number of orders per year = total number of boxes per year/ boxes per order
the number of orders per year = 18000/5000
the number of orders per year = 3.6 orders per year
A publisher is deciding whether or not to invest in a new printer. The printer would cost $900, and would increase the cash flows in year 1 by $500 and in year 3 by $800. Cash flows do not change in year 2.If the interest rate is 12% Is the investment in the new printer feasible?
Answer:
Yes, since NPV>0
Explanation:
The computation of the net present value is shown below:
= Present value of cash inflows - initial investment
where,
Present value of cash inflows is
= $500 ÷ (1 + 0.12)^1 + $800 ÷ (1 + 0.12)^3
= $446.43 + $569.42
= $1,015.85
And the intial investment is $900
So, the net present value is
= $1,015.85 - $900
= $115.85
Since the net present value comes in positive so the investment in new printer is feasible