Answer:
The optimal stocking level for the bakery is cakes 27.
Explanation:
Cost c = $ 7
Selling price p = $ 10
salvage value s = $ 5
Mean = 25
Standard deviation \sigma = 8
Cu = underage cost
= p-c
= $10 - $7
= $3
Co = overage cost
= c-s
= $7 - $5
= $2
P\leq C_{u}/(C_{u}+C_{o})
P\leq3/(3+2)
= 0.6
By using normsinv() function in excel we to find the correct critical value
The Z value for the probability 0.6 is 0.2533
The optimal stocking level is
=\mu +z\sigma
= 25 + 0.2533 *8
= 27.02
The optimal stocking level of bakery is 27.02
Therefore, The optimal stocking level for the bakery is cakes 27.
Answer:
Income statement will have an increased expense of $4.8 million and Revenue and cost of goods sold will decrease. In balance sheet the inventory will be decreased by the amount of crib toy inventory available.
Explanation:
Income Statement will show an expense of $4.8 million in this period as the cost of recall of inventory due to health hazard. Also sales and cost of goods sold will decrease by the amount of sales of crib toy in sales and by the amount of crib toys cost in cost of goods sold and will ultimately result in decrease in a gross profit of a company.
In the Balance Sheet the amount of Inventory will be decreased by the amount of crib toys available in stock.
Answer:
B) $26.30
Explanation:
To determine an investor's valuation of the stock we must calculate the present value of next year's dividend and selling price:
present value = [dividend / (1 + rate)] + [selling price / (1 + rate)]
present value = [$0.24 / (1 + 15%)] + [$30 / (1 + 15%)] = $0.21 + $26.09 = $26.30
Answer:
The second project should be chosen. Because the present value of the second project is greater than that of the first project.
Explanation:
The project that should be chosen can be determined by comparing the present value of both projects.
Present value is the cash flows from a project discounted at the discount rate.
Present value can be found using a financial calculator;
For project 1,
Cash flow each year from year one to six is $52,000
Discount rate = 15%
Present value =$196,793.10
For project 2,
Cash flow each year from year one to eight is $48,000
Discount rate = 15%
Present value =$215,391.43
The second project would be chosen because its present value is greater than that of the first project.
I hope my answer helps you
