Question 17

The following information relates to last year's operations at the Legumes Division of Gervani Corporation: Minimum required rat

Lubov Fominskaja [6]

Answer: $45000

Explanation:

Firstly, the operating asset will be calculated which will be:

Operating asset = Sales / Turnover

= 900,000/3

Operating assets = $300,000

Then, the net operating income will be: Return on investment × Operating assets

Net operating income = 300,000 × 15%

= 300,000*0.15

= $45,000

Therefore, Legume Division's net operating income last year is $45000

4 0

3 years ago

Central Perk orders their organic coffee filters from a South American supplier that mails them as inexpensively (hence, as slow

Damm [24]

Answer:

1495 filters are considered as safety stock.

Explanation:

d = 80 filters, std devd= 5, L = 14 days, std dev L= 2 days

Std dev dL = Sq rt ( Lσ d2 + d 2σ L2 ) = sq rt ( 350 + 25600) = 161 filter

z= 2.33 at 99% SL

safety stock = 2.33 X 161 = 375 filter

Reorder point = dL + Safety stock = 80 X 14 + 375 = 1495 filters

3 0

3 years ago

You have an idea for a company that sources fruits from local farms and makes fresh juices on a daily basis. You want to start a

Semmy [17]

Answer:

VRIO = Value Rarity Imitablility Organization.

Value highlights on the source is valued or not. It reflects that the company is systematized to deed the reserve of competence. Rarity is asked in positions of how infrequent and exclusive the assets are. Imitability means that how problematic is it for participants to duplicate the resource or competence. Organization is asked in positions of how fine the assets are structured to exploit the benefits in the market.

Therefore, it is focused that the value, rarity and the organization is focused in the question but imitability isn’t focused. However, some skills or resources are too expensive to be copied by other firms

5 0

3 years ago

A developer is proposing to build and operate an 8 store strip mall. Each unit would rent for $3,500 per month. It is expected t

lys-0071 [83]

Answer:

Requirement A: CAP Rate is 12.5%

Requirement B: Capitalized Value of the Property is $1,884,960

Requirement C: Loan Amount is $1,413,720

Requirement D: Debt Service Coverage Ratio is 1.85

Requirement E: Loan per unit is $176,715 Per Unit

Explanation:

Requirement A: Find the CAP Rate

The CAP Rate will be calculated using the following formula:

CAP Rate = Annual Net Operating Income (NOI) (Step1) / Property Capitalized Value (Step2)

Here

Operating Income is $235,620 (Step1)

Property Capitalized Value (Step2)

Now, by putting values we have:

CAP Rate = $235,620 / $1,884,960 = 12.5%

Step1: Find Annual Net Operating Income (NOI)

As we know that:

Operating Income = Expected Revenue - Operating Expense

Here

Expected Revenue from 8 Strip Malls = Rent / Month * 12 Months * (1 - Vacancy Ratio) * 8 Strips Malls

= $3,500 * 12 * (1 - 15%) * 8

= $285,600

Operating Expenses = Expected Revenue * 17.5%

= $285,600 * 17.5% = $49,980

Now by putting value in the above Operating Income equation, we have:

Annual Operating Income = $285,600 - $49,980 = $235,620

Step2: Find Property Capitalized Value (It is also Requirement B)

Property Capitalized Value = Annual Operating Income / Minimum Accepted Rate of Return (MARR)

Here

Annual Operating Income is $235,620 from Step1

MARR is 12.5%

By putting values, we have:

Capitalized Value of the Property = $235,620 / 12.5% = $1,884,960

Requirement C. Find Loan Amount

It is given in the question that the Loan Amount is 75% of Property Capitalized Cost. This implies:

Loan Amount = $1,884,960 * 75% = $1,413,720

Requirement D. Debt Service Coverage Ratio

Debt Service Coverage Ratio (DSCR) = Annual Net Operating Income / Total Debt Service for the Year

Here

Annual Net Operating Income is $235,620 from Step1

Total Debt Service for the Year $127,235 (See Step3 below)

By putting values, we have:

Debt Service Coverage Ratio = $235,620 / $127,235 = 1.85

Step3: Total Debt Service for the year

Total Debt Service for the year = Loan Amount * Debt Service Rate

Here

Loan Amount is $1,413,720

Debt Service Rate is 9%

By putting values, we have:

Total Debt Service for the year = $1,413,720 * 9% = $127,235

Requirement E. Find Loan Amount

We can find loan per unit by simply dividing the loan amount by number of strip mall. Here total number of strip mall are 8. This implies that:

Loan Per Unit = $1,413,720 / 8 Units = $176,715 Per Unit

3 0

3 years ago

Characteristics of mixed economy

masha68 [24]

Answer:

- Protection of Labor Rights

- Co-surviving Public and Private Sectors

- Safeguarding of Consumer Rights

- Economic Planning

Explanation:

Don't know how many you're looking for, or what specifically, but those are a few that I've learned

Hope it helped

5 0

3 years ago