Answer: B- Increase of $200,000
Explanation:
The extra revenue that will be gained if the company sells premium units will be;
= Premium price - normal price
= 17 - 10
= $7
There are 100,000 unit so the extra revenue is;
= 7 * 100,000
= $700,000
The increase in Net income will be;
= 700,000 - additional processing costs
= 700,000 - 500,000
= $200,000
Answer: d. 8.0%
Explanation:
The Stated Annual Rate of Interest on a bond refers to the coupon rate which is the amount that the company promises to pay on the bond pay period.
Looking at the question, the company is paying $400 every 6 months on the $10,000 bonds . The interest therefore is;
= 400/10,000
= 4%
Company pays 4% on the bonds every 6 months.
This 4% should be stated in annual terms so;
= 4% * 2
= 8%.
Answer:
C. 157
Explanation:
Safety stock = Z-score * Standard deviation of average demand * √lead time
Z-score for 74 % service level is 0.643
Standard Deviation of demand is 200
Lead Time = 1.5 weeks
Safety stock = 0.643 * 200 * √1.5
Safety stock = 0.643 * 200 * 1.224745
Safety stock = 157.502
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