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Ede4ka [16]
3 years ago
14

A computer company's yearly inventory cost is 40 percent (which accounts for the cost of capital for financing the inventory, wa

rehouse space, and the cost of obsolescence). Last year, the company had $400 million in inventory and cost of goods sold of $26 billion. What is the company's total inventory cost for the year (in $ million)?
Business
1 answer:
aksik [14]3 years ago
3 0

Inventory Costs plays a major role in ascertaining working capital requirements as well structuring cash flow statement.

Explanation:

In the given example,  

inventory cost  40 percent

Inventory Value $400 million

 

Ratio of inventory cos ts to inventory value = Inventory Cost / Inventory Value .

so in the current case it will be  40% x/$400 million

Hence, Inventory Cost 160 Million

Since the cost is fairly on a higher side at 40$ it should try to reduce it which will help in improving its bottom-line.

Company should focus on offering on discounts and promotions and reduce Obsolete Stock.  

It should work on restructuring and organizing warehouse costs by prioritizing inventory based on their movements.  

The procurement team should order in minimum quantities and benchmark reorder point.

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City Farm Insurance has collection centers across the country to speed up collections processes. The company also makes its disb
klasskru [66]

Answer:

City Farm Insurance

a. City Farm cash management system has freed up $1,000,000 ($4,500,000 - $3,500,000).

b. City Farm can earn on short-term investments an amount equivalent to $21,900,00 {($1,500,000 x 365) x 4%}

Explanation:

A good cash management system combines accounting with financial management to produce financial visibility and provide business insights that can help the entity to increase its earnings with short-term investments.  This is because it frees up investable cash.  An entity can invest its excess cash in these instruments: money market funds, treasury bills, and certificates of deposit, offered by commercial banks.

5 0
3 years ago
Stocks have market prices, and they also have intrinsic values. If the market price is below the intrinsic value as estimated by
oee [108]

Answer:

True

Explanation:

If the price of a stock drops suddenly, there is more supply than demand. People want out - and they usually want out for a reason.

5 0
3 years ago
Which of the following tactics for overcoming resistance to change is most likely to be beneficial when employees' fear and anxi
ladessa [460]

Answer:

b) Building support and commitment

Explanation:

In order to support employees and feel the fear of change, it is necessary to build trust and commitment.

Here are some techniques to help the employee:

1. Make your employees feel that their work is important

2. Keep them in constant training

3. Maintain communication with all members of the organization

4. Establishes recognition programs and awards prizes

5. Promotes positive attitudes

6. Be flexible with schedules.

7. Conduct satisfaction surveys

4 0
4 years ago
"Steele Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. Steele Co
adell [148]

Answer:

B) $ 4.25

Explanation:

From the data provided in the question, we need to classify the items into manufacturing costs.

Salary of production supervisor                                        $ 40,000

Indirect materials                                                                $   8,000

Rent on factory equipment                                                <u>$  20,000</u>

Total manufacturing costs                                                  <u>$ 68,000</u>

Estimated Machine Hours                                                      16,000

Manufacturing Overhead - $ 68,000/ 16,000 hours         $   4.25 per machine hours                                        

The other items provided in the question, sales commission and advertising expenses are selling expenses and are not manufacturing costs.

6 0
3 years ago
Wenjing purchases a bond for $2,000 with 12 remaining $40 quarterly coupon payments. The bond broker who sells her the bond reas
egoroff_w [7]

Answer:

Wenjing

The par value that would result in the return the bond broker promises is:

= $1,333.

Explanation:

a) Data and Calculations:

Bond amount paid = $2,000

Quarterly coupon payments = $40

Remaining coupon payments = 12

Bond maturity period = 3 years (12/4)

Promised returns per quarter = 3%

Par value of bond = Quarterly premium/Quarterly returns in percentage = $1,333 ($40/0.03)

Check: 3% of $1,333 = $40

This implies that the bond's annual interest rate = 12% (3% * 4)

8 0
3 years ago
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