Solution:
Activity Units Units cost Cost of Goods Available
Beginning Inventory 11 $65.00 $715
1st week purchase 11 $66.00 $726
2nd week purchase 11 $67.00 $737
3rd week purchase 11 $70.00 $770
4th week purchase 11 $75.00 $825
Units available for sale 55
Cost of goods available for sale $3,773
Answer:
annual demand = 380 * 12 = 4,560
order cost = $8.50
annual holding cost = $0.45 * 25% = $0.1125
EOQ = √[(2 * 4,560 * $8.50) / $0.1125] = 830.10 ≈ 830 units
time between placement of orders = 830 units / 4,560 units = 0.182 years = 2.18 months
reorder point = 4,560 units * 2/12 (lead time) = 760 units
A new order should be placed when the inventory level is 760 units
Answer:
A) according to put call parity:
price of put option = call option - stock price + [future value / (1 + risk free rate)ⁿ]
put = $6.93 - $125 + [$140 / (1 + 5%)¹/⁴] = $6.93 - $125 +$138.30 = $20.23
B)
you have to purchase both a put and call option ⇒ straddle
the total cost of the investment = $6.93 + $20.23 = $27.16, this way you can make a profit if the stock price increases higher than $125 + $20.23 = $145.23 or decreases below than $125 - $20.23 = $104.77
Answer:
In the real world, pollution is served as an example of market failure. ... According to the diagram, in this case pollution, negative externalities occurs. At the output Qe , equilibrium output is achieved by the firm, at which the marginal private cost equals the price of the firm's output.
