A manager must make a decision on shipping. There are two shippers, A and B. Both offer a two-day rate: A for $522 and B for $53
2. In addition, A offers a three-day rate of $478 and a nine-day rate of $410, and B offers a four-day rate of $456 and a seven-day rate of $424. Annual holding costs are 30 percent of unit price. Three hundred and thirty boxes are to be shipped, and each box has a price of $154. Which shipping alternative would you recommend?
1 answer:
Answer:
Alternative of shipping boxes through shipper A by three-day rate offer is most economical option. Cost of shipping is $603.31, which lowest of all costs.
Explanation:
Given Q = 330 boxes
Unit price, p = $154
Holding cost = H = 30% of p = 0.3*154 = $46.2 per box per annum
Total holding cost = HC = Q*H*(d/365)
Total Shipping Cost = R + HC
Calculation of shipping cost of various alternatives are attached in the following images.
Alternative of shipping boxes through shipper A by three-day rate offer is most economical option. Cost of shipping is $603.31, which lowest of all costs.
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Answer:
total rate of return on the Bond = 9.40%
Explanation:
given data
coupon bonds = 5.8%
bonds price = $1,030
maturity time = 14 year
required return on the bonds = 5.1 percent
solution
we know here market price of the bond is Present Value of Coupon Payments + Present face Value
so that face Valueof bond = $1,000
and here annual Coupon Amount will be
annual coupon amount = $1000 × 5.80%
annual coupon amount = $58
and here Market Price of the Bond will be
Market Price of Bond = Present Value of Coupon Payments + Present face Value ......................1
here Present Value of Coupon Payments at PVIFA 5.10% and 14 Years
Present Value Annuity Inflow Factor (PVIFA) = ....2
Present Value Annuity Inflow Factor =
Present Value Annuity Inflow Factor = 9.83566
and
Present Value Inflow Factor (PVIF) 5.10%, 14 Years= ...........3
Present Value Inflow Factor (PVIF) =
Present Value Inflow Factor = 0.49838
so
Market Price of Bond = ( $58 × 9.83566 ) + ( $1,000 × 0.49838 )
Market Price of Bond = $1,068.85
so total rate of return on the Bond will be
total rate of return on the Bond = [ { Annual Coupon Amount + ( Change in Bond Price ) } ÷ Current Price] ...............4
total rate of return on the Bond =
total rate of return on the Bond = 9.40%