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e-lub [12.9K]
3 years ago
15

The Deer Valley Farm (DVF) produces a natural organic fertilizer, which it sells mostly to gardeners and homeowners. The annual

demand for fertilizer is 220,000 pounds. The farm is able to produce 305,000 pounds annually. The cost to transport the fertilizer to from the plant to the farm is $620 per load. The DVF sells the fertilizer in containers with 40 pounds of fertilizer. The annual carrying cost is 0.12 per pound.
a. Compute the optimum load size, the maximum fertilizer level at the farm, and the total minimum cost.
b. If the farm can increase the production capacity to 360,000 pounds per year, will it reduce total inventory costs?
Business
1 answer:
Marizza181 [45]3 years ago
5 0

Answer:

The Deer Valley Farm (DVF)

a. Optimum load size = 7,625 containers

Maximum fertilizer level at the farm = 5,500 containers

Total minimum cost = $189,110,200

b. No.  Total inventory costs will increase.

Explanation:

a) Data and Calculations:

Annual demand for fertilizer = 220,000 pounds

Annual production units = 305,000 pounds

Inventory = 85,000 pounds

Cost to transport the fertilizer to and from the plant to the farm = $620

Each container holds = 40 pounds

Annual carrying cost per pound = $0.12

Optimum load size = 305,000/40 = 7,625 containers

Maximum fertilizer level at the farm = 5,500 containers (220,000/40)

Total minimum cost = $ ($620 * 305,000) + ($0.12 * 85,000)

= $189,110,200 ($189,100,000 + 10,200)

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Answer:

11.11%

Explanation:

<em><u>The full question with table is attached.</u></em>

<em><u /></em>

We need the rate of return formula using Capital Asset Pricing Model (CAPM). The formula is:

R=R_f+\beta(R_m-R_f)

Where

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R_f is risk-free return rate (5% = 0.05)

R_m is the market rate of return (11% = 0.11)

To get \beta, we take the weighted average of the portfolio.

Weight of Stock A = 1,075,000/3,000,000 = 0.3583

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Weight of Stock D = 500,000/3,000,000 = 0.1667

Portfolio Beta = (0.3583*1.2) + (0.225*0.50) + (0.25*1.40) + (0.1667*0.75) = 1.02  

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7 0
3 years ago
A bankrupt who owns a house has the option of either paying the mortgage or losing his home. The court cannot reduce the amount
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Answer: I will vote in favor of the bill.

Explanation:

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3 years ago
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The difference between the total assets of a firm and its total liabilities is called <u>net worth</u>.

Net worth is the value of all of your property, minus the whole of all your liabilities. Positioned every other manner, it's miles what you personal minus what you owe. If you owe extra than you own, you have got a bad internet worth. if you very own greater than you owe you will have a nice net well worth.

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4 0
1 year ago
The Sherman Antitrust Act A. was concerned with self-interest dominated Nash equilibriums in prisoners' dilemma games. B. restri
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The Sherman Antitrust Act of 1890 is a US legislation that regulates the level of competition that exists among businesses. It was passed by the Congress when Benjamin Harrison was president. This act is aimed at protecting trade and commerce from illegal restraints and monopolies. It was enacted by the 51st Congress of the United States. This act was introduced by John Sherman in the senate house.

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3 years ago
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