Answer: $837
Explanation:
The following information can be gotten from the question:
Purchase price = $840 per share
Premium of call option = $35 per share
Premium of put option = $32 per share
From the above, the premium received will be:
= $35 - $32 = $3
Investors break even will then be:
= Purchase price - Premium received
= $840 - $3
= $837
Answer:
7.5 Years
Explanation:
The computation of the payback period of the given machine is shown below:
<u>Year Initial outflow Cash flow Cumulative cash flow</u>
(52000)
1 10,000 10,000
2 10,000 20,000
3 10,000 30,000
4 8,000 38,000
5 8,000 46,000
6 2,000 48,000
7 2,000 50,000
8 4,000 54000
9 4,000 58000
10 4,000 62000
Now the Payback period is
= Completed years+ required cash ÷ annual cash inflow
= 7 years + 2000 ÷ 4000
= 7.5 Years
Answer:
Quantity discounts can be taken advantage of for large lot sizes.
Explanation:
The EOQ model assumptions:
the order of one item does not intervene with the other.
The order will arrive without delay and with a specific amount of goods.
no losses or damage in transit
The EOQ does not consider the discount for large lot size, their formula does not consider the value of the goods:

Its use: Demand of the good
cost of Setup, or ordering cost.
and Holding cost, the cost of keeping the inventory
There is no variable to account for discounts for order size in this method