Answer:
Annual demand (U) = 90.000 bags
Cost of each bag = $1.50
Inventory carrying cost per unit(C) = $1.50 × 20% = 0 30
Ordering cost per unit (O) = $15
Part A)
EOQ = 3,000
Part B)
Maximum inventory = EOQ + Safety inventory on hand
Maximum inventory = 3000 + 1000
Maximum inventory = 4.000
Part C)
Average inventory = Maximum inventory + Minimum or Safety /2
Average inventory = 4,000 + 1,000 / 2
Average inventory =2,500
Part D)
How often company order = Annual demand / EOQ
How often company order = 90,000 / 3.000
How often company order = 30
Answer:
the answer is (C) both of the choices would produce the same return
Answer:
$8.78
Explanation:
National advertising made dividend payment of $0.75 per share
The dividend is expected to grow at a constant rate of 6.50%
= 6.50/100
= 0.065
The company beta is 1.85
The required return on the market is 10.50%
The risk free rate is 4.50%
The first step is to calculate the rate of return using the CAMP model
R = Risk free rate+beta(market return-risk free rate)
= 4.50%+1.85(10.50%-4.50%)
= 4.50%+1.85×6%
= 4.50%+11.1
= 15.6
Required rate of return= 15.6
Therefore the current stock price can be calculated as follows
Po= Do(1+g)/(r-g)
Where Do= 0.75, g= 0.065, r= 15.6
Po= 0.75(1+0.065)/(0.156-0.065)
Po= 0.75(1.065)/0.091
Po= 0.7987/0.091
Po= $8.78
Hence the company current stock price is $8.78
If the government and central bank don’t follow the economic policy, it could result in an economic depression
