Answer:
5.52%
Explanation:
Cost of Furniture= $150,000
discount= 5.25% (120-day note)
To get the exporter's true effective annual financing cost, we have:
![150,000*[1-(0.0525*120/360)] = 147,375](https://tex.z-dn.net/?f=%20150%2C000%2A%5B1-%280.0525%2A120%2F360%29%5D%20%3D%20147%2C375%20)
=(150,000/147,375) 365/120-1 = 5.52%
Therefore, the exporter's true effective annual financing cost is 5.52%
Answer:
(b) $ 43,750 increase
Explanation:
The computation of the effect on operating income is shown below:
= Contribution margin per unit × special order
where,
Contribution margin per unit = Selling price per unit - Variable expense per unit
= $7.50 - $5.75
= $1.75
And, the special order is of 25,000 pairs
Now put these values to the above formula
So, the value would equal to
= $1.75 × 25,000 pairs
= $43,750
The fixed cost would remain unchanged.
Fixed expenses
are $76,000 per month and the company is selling 4,600 units per
month.
Answer:
≈ 25%
Explanation:
Given data:
Cpk = 0.22
Determine The percentage of production that falls beyond the specification limit ( assuming normal distribution )
first calculate the value of Z ;
Cpk = Z /3
hence Z = Cpk * 3 = 0.22 * 3 = 0.66
The percentage of the production can be determined by
( 1 - value obtained from the standard normal table for the value of Z =0.66 )
1 - 0.7454 = 0.2546 ≈ 25%
Answer:
a. What is the PI if the discount rate is 20%?
profitability index = present value of cash flows / initial outlay
PI = $9,137.41 / $5,000 = 1.83
b. What is the NPV if the discount rate is 20%?
NPV = -$5,000 + $9,137.41 = $4,137.41
c. What is the IRR if the discount rate is 20%?
the discount rate is irrelevant when you are calculating the IRR, since the IRR is the discussion rte at which the NPV = $0
IRR = 55.23%
Explanation:
Initial Outlay -$5,000
Year 1 $3,000
Year 2 $3,500
Year 3 $3,200
Year 4 $2,800
Year 5 $2,500.
