You are working as a private math tutor to raise money during spring break. Assuming you want to earn as much money as possible,
1 answer:
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Answer:
A) economic order quantity ( order quantity model that will minimize the total holding cost and ordering costs ) = =
= 122. 74 ≈ 122 ( optimal ordering quantity ) units
B) Annual holding cost = 23 * 122 / 2 = $1403
C ) Annual ordering costs = 1500/122 * 77 = $947
D ) The reorder point = daily demand * lead time = 50 * 3 = 150 units
Explanation:
Annual demand for connectors : 1500
ordering cost ( cost to place and process an order ) : $77
annual holding cost per unit : $23
A) economic order quantity ( order quantity model that will minimize the total holding cost and ordering costs ) = =
= 122. 74 ≈ 122 ( optimal ordering quantity ) units
B) Annual holding cost = 23 * 122/2 = $1403
C ) Annual ordering costs = 1500 / 122 * 77 = $946.72 ≈ $947
D ) The reorder point = daily demand * lead time = 50 * 3 = 150 units
daily demand = 1500 / 300 = 50
lead time = 3
Answer:
a. 7.30%
b. 4.745%
Explanation:
For computing the pretax cost of debt we have to applied the RATE formula i.e to be shown in the attachment below:
Given that,
Present value = $1,000 × 106% = $1,060
Assuming figure - Future value or Face value = $1,000
PMT = 1,000 × 8% ÷ 2 = $40
NPER = 14 years × 2 = 28 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after applying the above formula
a. The pretax cost of debt is
= 3.65% × 2
= 7.30%
b. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 7.30 % × ( 1 - 0.35)
= 4.745%
