SEVEN (7) rewards and THREE (3) Challenges of the CEO of this company

Liquidity risk is defined as the risk of A. not being able to sell an investment conveniently and at a reasonable price. B. havi

Soloha48 [4]

Answer:

having declining price levels affect the reinvestment rate of your current income stream

3 0

3 years ago

The Tree Top Airline (TTA) is a small feeder-freight line started with very limited capital to serve the independent petroleum

nikitadnepr [17]

Answer:

To make it feasible it will need to operate 7 or more planes.

Explanation:

450,000 maintenance facility

useful life of 15 year

salvage value of 100,000

<u>saving cost per plane:</u>

third party cost - own facility cost = cost savings

35,000 - 25,000 = 10,000

present value of the salvage value: (present value of a lump sum)

$\frac{salvage }{(1 + rate)^{time} } = PV$

salvage $ 100,000

time 15 years

Minimum accepter rate of return: 0.12000

$\frac{100000}{(1 + 0.12)^{15} } = PV$

PV 18,269.6261

present worth of the facility:

450,000- 18,268.63 = 431,731.37

Now we determinate the PMT over a 15 years period to know the cost savings per year to justify the facility:

$PV \div \frac{1-(1+r)^{-time} }{rate} = C\\$

PV 431,731

time 15

rate 0.12

$431731.37 \div \frac{1-(1+0.12)^{-15} }{0.12} = C\\$

C $ 63,388.630

As each plane cost savings are 10,000

63,388.62 / 10,000 = 6.39

the company will need to operate 7 or more planes.

3 0

3 years ago

Smashed pumpkins co. Paid $200 in dividends and $624 in interest over the past year. The company increased retained earnings by

Maru [420]

Dividends that were paid last year = $200

Retained earnings = $522

Net Income = Retained earnings + Dividends paid = 200+522 =722

Tax rate was 38%.

Earnings before tax (EBT) = Net income/ (1-tax rate) =722/(1-0.38) = 1,164.52

Interest expense= 624

Earnings before interest and tax (EBIT) = EBT + interest expense = 1,164.52 + 624 = 1,788.52

Earnings before interest and tax (EBIT) = 1,788.52

3 0

3 years ago

If a firm’s expenses equal or exceed its revenue, what actions might management take?

exis [7]

In a case whereby firm’s expenses equal or exceed its revenue, the actions that might be taken by management is To check their production process and check the cost of their input.

<h3>What are expenses?</h3>

This are the cost of inputs that the company put into production of their goods and services.

When expense is higher than revenue then the organization is running at loss, but when the revenue equal to the expenses, there is no Gain.

Therefore, the actions that might be taken by management is to check their production process .

Learn more about expenses at:

brainly.com/question/4953989

7 0

2 years ago

A resort hotel is planning to install a computerized inventory system to manage complementary guest items such as soap and shamp

jeka57 [31]

Answer:

a) safety stock = z-score x √lead time x standard deviation of demand

z-score for 99.9% = 3.29053

√lead time = √7 = 2.6458

standard deviation of demand = 3

safety stock = 3.29053 x 2.6458 x 3 = 26.12 ≈ 26 soaps

reorder point = lead time demand + safety stock = (7 x 16) + 26 = 138 soaps

EOQ = √[(2 x S x D) / H]

S = order cost = $10

D = annual demand = 16 x 365 = 5,840

H = $0.05

EOQ = √[(2 x $10 x 5,840) / $0.05] = 1,528.40 ≈ 1,528 soaps

b) total order costs per year = (5,840 / 1,528) x $10 = $38.22

total holding costs = (1,528 / 2) x $0.05 = $38.20

total annual ordering and holding costs = $76.42

4 0

3 years ago