If expected dividends grow at 7% and the appropriate discount rate is 9%, what is the value of a stock with an expected dividend
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Answer:
a) 32 refrigerators
b) 28.39 approximately 29 refrigerators
Explanation:
Given:
Cost of order, S = $100
H = 20% of 500 = 100
Cost of refrigerator = $500
Annual demand, D = 500
S.d = 10
Lead time, L = 7 days.
a) To find the economic order quantity, Q_opt, let's use the formula:
The economic order quantity is 32 refrigerators.
b) The reorder point, R, is calculated as:
R = (d' * L) + ( z * s.d)
Where d' is daily demand which is calculated by dividing annual demand by 365 days.
d' = 500/365 = 1.37
At 97% service probability.
Using the excel function, NORMSINV(0.97) = 1.88.
Therefore z = 1.88
Solving for R, we have:
R = (1.37 * 7) + (1.88 * 10)
= 28.39
≈ 29
If the distributor wants a 97% service probability, the reorder point, R, should be 29 refrigerators
Answer:
Please find the diagrams in the attached images
Explanation:
A) If a surgeon warns that high-cholesterol foods cause heart attacks, the demand for eggs would fall because eggs are high in cholesterol. The fall in demand would shift the demand curve to the left , price and quantity would fall.
B. Complementary goods are goods consumed together. If the price of a complementary good falls, the demand for the other good increases. If the price of bacon falls, the demand for eggs would increase. The demand curve would shift to the right, the price and quantity would increase.
C. If the price of chicken feed increases, the cost of producing eggs increases and the quantity supplied falls. The supply curve shifts to the left, prices rise and quantity falls.
D. If Caesar salad becomes more trendy, the demand for eggs increases. The demand curve shifts to the right, price and quantity increases.
E. Technological innovation would increase the quantity supplied. The supply curve would shift to the right, price falls and quantity increases.
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Explanation:
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