The estimated future value of your 401(k) account would be approximately $624,189.69. You can withdraw approximately $4,239.60 per month during retirement if you want to deplete your account over 30 years.
To calculate the estimated future value of your 401(k) account, we need to consider your annual salary, the contribution rate, the company match, the rate of return, and the number of years until retirement.
Given that you earn $40,500 per year and contribute 5% of your salary to the 401(k) plan, your annual contribution would be $2,025 ($40,500 * 0.05). The company provides a $0.50 per $1.00 match on your contributions up to 3% of your salary, which means they would match $1,215 ($2,025 * 0.03).
The total annual contribution to your 401(k) account would be the sum of your personal contribution and the company match, resulting in $3,240 ($2,025 + $1,215) contributed annually.
Assuming an 11% annual return on your 401(k) investments, compounded annually, and a retirement age of 55 (30 years from now), we can calculate the future value of your 401(k) account using the formula for compound interest:
FV = P * (1 + r)^n
Where:
FV is the future value of your 401(k) account.P is the annual contribution.r is the annual interest rate.n is the number of years until retirement.Plugging in the values, we get:
FV = $3,240 * (1 + 0.11)^30 ≈ $624,189.69
Therefore, the estimated future value of your 401(k) account would be approximately $624,189.69.
To determine how much you can withdraw monthly during retirement if you want to deplete your account over 30 years, we divide the future value by the number of months in 30 years (360 months):
Withdrawal amount = FV / Number of months
Withdrawal amount = $624,189.69 / 360 ≈ $4,239.60
Hence, you can withdraw approximately $4,239.60 per month during retirement if you want to deplete your account over 30 years.
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Occam Industrial Machines issued 148,000 zero coupon bonds five years ago. The bonds have a par value of $1,000 and originally had 30 years to maturity with a yield to maturity of 7.3 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.4 percent. Assume semiannual compounding for the bonds. What is the dollar price of the bonds? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Bond price What is the market value of the company's debt? Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89. If the company has a $46.3 million market value of equity, what weight should it use for debt when calculating the cost of capital? Note: Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 1616.
To calculate the dollar price of the bonds, we can use the present value formula:
Bond price = (Face value / (1 + YTM/2)^(2*n))
Where:
Face value = $1,000
YTM = Yield to maturity (8.4%)
n = Number of periods (30 years * 2 semiannual periods per year = 60 periods)
Bond price = (1,000 / (1 + 0.084/2)^(2*60))
Bond price = $317.09
The dollar price of the bonds is $317.09.
To calculate the market value of the company's debt, we multiply the number of bonds by the bond price:
Market value of debt = Number of bonds * Bond price
Market value of debt = 148,000 * $317.09
Market value of debt = $46,934,320
The market value of the company's debt is $46,934,320.
To calculate the weight of debt for cost of capital calculation, we need to determine the total capital structure by adding the market value of debt and market value of equity:
Total capital structure = Market value of debt + Market value of equity
Total capital structure = $46,934,320 + $46,300,000
Total capital structure = $93,234,320
Weight of debt = Market value of debt / Total capital structure
Weight of debt = $46,934,320 / $93,234,320
Weight of debt = 0.5037 (rounded to 4 decimal places)
The weight of debt for calculating the cost of capital is 0.5037 or 50.37%.
In conclusion, the dollar price of the bonds is $317.09. The market value of the company's debt is $46,934,320. The weight to be used for debt in calculating the cost of capital is 0.5037 or 50.37%
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Randy was asked to create a list of tasks and their descriptions that could be used as a basis to identify components of a job specific to his organization. Randy should use a critical incident analysis to complete these tasks. T/F
The correct option is False.
Randy should use a job analysis, not a critical incident analysis, to create a list of tasks and their descriptions for identifying components of a job specific to his organization.
A job analysis is a systematic process of gathering and analyzing information about the tasks, responsibilities, and requirements of a job. It involves examining the duties, skills, knowledge, and abilities needed for successful job performance. The output of a job analysis is typically a job description and a list of job specifications.
On the other hand, a critical incident analysis is a technique used to identify and document specific critical incidents or examples of effective or ineffective performance on the job.
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The risk-free rate is 6% and the market risk premiun (Rm - Rf) is 8%.
Stock A StockB
Beta $1.20 $1.00
Expected dividend next year $1.50 $1.08
Growth rate 5% 8%
Current price $15 $12
1. what are the required rates of returns on both stocks using the CAPM model?
2. What are the expected rates of return of both stocks using the dividend growth model/
3. Which stock would you recommend to purchase or sell? Why?
If an investor is risk-averse and prefers a lower-risk investment, they might consider Stock B as it has a lower required rate of return. On the other hand, if an investor is willing to take on more risk for potentially higher returns, they might consider Stock A.
To answer the questions, we'll use the Capital Asset Pricing Model (CAPM) and the Dividend Growth Model.
Required Rates of Returns using CAPM:
The formula for the required rate of return using CAPM is:
Required Rate of Return = Risk-Free Rate + Beta * Market Risk Premium
For Stock A:
Required Rate of Return = 6% + 1.20 * 8% = 6% + 9.6% = 15.6%
For Stock B:
Required Rate of Return = 6% + 1.00 * 8% = 6% + 8% = 14%
Expected Rates of Return using the Dividend Growth Model:
The formula for the expected rate of return using the Dividend Growth Model is:
Expected Rate of Return = Dividend Yield + Dividend Growth Rate
For Stock A:
Dividend Yield = Dividend / Current Price = $1.50 / $15 = 0.10 or 10%
Expected Rate of Return = 10% + 5% = 15%
For Stock B:
Dividend Yield = Dividend / Current Price = $1.08 / $12 = 0.09 or 9%
Expected Rate of Return = 9% + 8% = 17%
Recommendation:
Based on the required rates of returns using the CAPM model, Stock A has a higher required rate of return (15.6%) compared to Stock B (14%). This suggests that Stock A carries more risk.
Based on the expected rates of return using the dividend growth model, Stock B has a higher expected rate of return (17%) compared to Stock A (15%). This indicates that Stock B has the potential for higher returns.
Ultimately, the decision to purchase or sell a stock should also take into account other factors such as the investor's overall investment strategy, portfolio diversification, and individual financial goals and risk tolerance.
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a 6-month call has a strike price of $35.70. the stock price is currently $30. this call has a lower price limit of: a. $35.70. b. $0.70. c. $30. d. -$0.70. e. $0.
The lower price limit for the stock price which is currently $30 will be option e $0.
To calculate the lower price limit, we subtract the stock price from the strike price:
Lower Price Limit = Strike Price - Stock Price
Lower Price Limit = $35.70 - $30
Lower Price Limit = $5.70
Therefore, the lower price limit of the call option is $5.70.
Among the given options, the answer is e. $0.
A call option gives the holder the right to buy a specified asset (in this case, the stock) at a predetermined price (the strike price) within a specific time period (6 months in this case). The lower price limit of a call option refers to the minimum value it can have.
Therefore, the call option has no intrinsic value, and the lower price limit is $0. This means that the option holder would not exercise the option as it would not be profitable to buy the stock at a higher strike price when it is already available at a lower market price.
Among the provided options, the correct answer is e. $0, reflecting the absence of intrinsic value for the call option at the current stock price.
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.Which of the following arguments could be made as evidence that the market for produce sold at a farmers' market is perfectly competitive?
a. The U.S. Department of Agriculture has established standards for the labeling of organic produce sold at farmers' markets.
b. Sales of organically grown food have increased at a rate of 20 percent per year.
c. As more farmers began selling their products at farmers' markets, the increase in supply has driven down prices to the point where they just cover the cost of production.
d. The profits earned by farmers who sell their products at farmers' markets have continued to grow, despite the increasing number of farmers entering this market.
The argument that could be made as evidence that the market for produce sold at a farmers' market is perfectly competitive is option C - As more farmers began selling their products at farmers' markets, the increase in supply has driven down prices to the point where they just cover the cost of production.
Perfect competition is a market structure in which there are many buyers and sellers, all selling homogeneous products, with perfect information, no barriers to entry or exit, and no market power. In such a market, no single buyer or seller can influence the price of the product.
Option C states that the increase in supply of produce sold at farmers' markets has driven down prices to the point where they just cover the cost of production. This is an important characteristic of a perfectly competitive market as it indicates that the market price is determined solely by the forces of supply and demand. In a perfectly competitive market, firms earn zero economic profit in the long run, which means that they are only able to cover their costs of production. This is because there are no barriers to entry or exit, and any profits earned in the short run will attract new entrants into the market, driving down prices until they are just covering costs.
Options A and B do not provide evidence of a perfectly competitive market. The establishment of standards for labeling organic produce sold at farmers' markets by the U.S. Department of Agriculture indicates that there is some level of regulation in the market, which is not a characteristic of a perfectly competitive market. The increase in sales of organically grown food does not necessarily indicate a perfectly competitive market, as it could be due to other factors such as changes in consumer preferences or increased marketing efforts.
Option D is also not evidence of a perfectly competitive market. The fact that profits earned by farmers who sell their products at farmers' markets have continued to grow despite an increasing number of farmers entering the market suggests that there may be some market power or product differentiation, which are not characteristics of a perfectly competitive market.
In conclusion, the argument that the market for produce sold at a farmers' market is perfectly competitive can be made based on option C, as it indicates that prices are determined by the forces of supply and demand and that profits earned by farmers are just enough to cover their costs of production.
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in the practice of relationship marketing, the definition of a customer is taken to another level. which of the following best illustrates how a company practicing relationship marketing is different from a traditional transaction-based marketer? the city pool allows kids 12 years and younger to swim for free on fridays. the purchasing department of a defense contractor invites its suppliers to attend an annual golf outing. the heads of the financial departments meet with the chief financial officer to discuss year-end financial reporting. a local coffee shop distributes coupons for $.50 off each cup of coffee.
The local coffee shop distributing coupons is a mix of both transaction-based and relationship marketing - it may encourage customers to make a purchase, but it also rewards loyalty with the opportunity to save money.
It focuses on building long-term relationships with customers, rather than just completing a single transaction. This approach is about creating trust and loyalty with customers by providing personalized experiences and showing that the company cares about their needs and preferences.
Out of the options given, the city pool allowing free swimming for kids is an example of relationship marketing because it is a gesture of goodwill towards families in the community.
Similarly, the defense contractor inviting its suppliers to a golf outing is also relationship marketing because it fosters a sense of partnership and collaboration between the company and its suppliers.
The meeting between financial department heads and the CFO is more likely a transaction-based approach, as it focuses on the financial performance of the company rather than building relationships with customers. Finally, the local coffee shop distributing coupons is a mix of both transaction-based and relationship marketing - it may encourage customers to make a purchase, but it also rewards loyalty with the opportunity to save money.
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Gaston owns equipment that cost $28,500 with accumulated depreciation of $5,700. Gaston sells the equipment for $20,500. Which of the following would not be part of the journal entry to record the disposal of the equipment?
a. Credit Equipment $28,500.
b. Debit Cash $20,500.
c. Debit Loss on Disposal of Equipment $2,300.
d. Credit Gain on Disposal of Equipment $2,300.
e. Debit Accumulated Depreciation $5,700.
"Credit Gain on Disposal of Equipment $2,300," would not be part of the journal entry to record the disposal of the equipment. The correct option is d.
When Gaston sells the equipment, the first step is to remove the asset's cost and accumulated depreciation from the books. This involves crediting Equipment for $28,500 (option a) and debiting Accumulated Depreciation for $5,700 (option e).
Next, Gaston receives cash for the sale, so a debit to Cash for $20,500 (option b) is recorded.
To determine if there's a gain or loss on the disposal, we need to compare the net book value of the equipment (cost minus accumulated depreciation) to the cash received. In this case, the net book value is $28,500 - $5,700 = $22,800. Since Gaston sells the equipment for $20,500, which is less than its net book value, there's a loss on disposal.
The loss on disposal is calculated as the net book value minus the cash received: $22,800 - $20,500 = $2,300. To record this loss, a debit to Loss on Disposal of Equipment for $2,300 (option c) is necessary.
Since there's a loss on disposal, a credit to Gain on Disposal of Equipment (option d) would not be appropriate in this journal entry.
Therefore, The correct option is d. Credit Gain on Disposal of Equipment $2,300.
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a monopolist produces two unrelated goods, x and y. the demand for x is currently price elastic and the demand for y is currently price inelastic. to increase its total revenue, the firm should change the price of x and y in which of the following ways? responses price of x price of y increase no changeprice of x price of y increase no change , price of x price of y increase decreaseprice of x price of y increase decrease , price of x price of y increase increaseprice of x price of y increase increase , price of x price of y decrease increaseprice of x price of y decrease increase , price of x price of y decrease decrease
Thr decrease in price for good y would need to be carefully considered, as a decrease in price could potentially lead to a decrease in revenue if the demand becomes more elastic.
To increase its total revenue, the monopolist should increase the price of good y and keep the price of good x the same. This is because the demand for good y is currently price inelastic, meaning that a change in price will not have a significant impact on the quantity demanded. As a result, the increase in price will lead to an increase in total revenue for the firm. On the other hand, the demand for good x is currently price elastic, meaning that a change in price will have a significant impact on the quantity demanded. Therefore, increasing the price of good x would lead to a decrease in total revenue for the firm.
Alternatively, the monopolist could decrease the price of good x and keep the price of good y the same or decrease it slightly. This is because the decrease in price for good x would lead to an increase in demand and ultimately an increase in total revenue. However, the decrease in price for good y would need to be carefully considered, as a decrease in price could potentially lead to a decrease in revenue if the demand becomes more elastic.
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can a real estate attorney draft a real estate contract? no, only a real estate agent can draft a contract. only if the contract involves $100,000 or more. yes. attorneys can draft any type of contract. no, only a licensee can draft a contract.
Yes, a real estate attorney can draft a real estate contract. Real estate attorneys are qualified professionals with expertise in real estate law.
They have the knowledge and skills necessary to draft legally binding contracts related to real estate transactions. As legal professionals, attorneys are well-versed in contract law and can ensure that the contract accurately reflects the intentions of the parties involved, includes all necessary provisions, and adheres to relevant laws and regulations. While real estate agents can assist in the preparation of certain contractual documents, such as standard forms or templates, it is generally recommended to involve a real estate attorney for more complex or customized contracts to ensure legal compliance and protect the interests of the parties involved. Therefore, the statement that attorneys can draft any type of contract, including real estate contracts, is accurate.
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martinez corporation reported net sales of $767,000, net income of $140,000, and total assets of $7,654,374. the profit margin is: multiple choice 5.48%. 1.83%. 81.75%. 18.25%. 548.0%.
Martinez Corporation reported net sales of $767,000, net income of $140,000, and total assets of $7,654,374. To calculate the profit margin, we divide the net income by the net sales and multiply by 100.
Martinez Corporation reported net sales of $767,000 and a net income of $140,000. To calculate the profit margin, divide the net income by net sales and multiply by 100. In this case, the profit margin is ($140,000 / $767,000) x 100 = 18.25%. Therefore, the correct answer is 18.25%. This percentage indicates how much of the revenue is retained as profit after accounting for all the expenses. Therefore, the profit margin is (140,000/767,000) x 100 = 18.25%. This means that for every dollar of sales, Martinez Corporation is earning 18.25 cents of profit. It is important to note that profit margin is a key metric used by investors and analysts to evaluate a company's financial health and profitability. In this case, the profit margin of 18.25% suggests that Martinez Corporation is generating a healthy profit relative to its sales. Therefore, the correct answer to the multiple-choice question is 18.25%.
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(a) Can the forward discount be viewed as the cost of hedging an accounts receivable? Discuss.
(b) Given the following data on various currencies (including some historical ones, namely BEF, DEM, NLG, ITL and FRF) for the spot rate St, the forward rate Ft,T, the domestic interest rate rt,T and the foreign interest rate r*t,T respectively), are there any arbitrage opportunities? If so, how would you make a risk-free profit?
a) The forward discount can be viewed as a potential cost of hedging an accounts receivable, depending on the specific circumstances and assumptions made. To understand this, let's first define the forward discount.
The forward discount refers to the situation where the forward exchange rate (F) is lower than the spot exchange rate (S) of a currency. Mathematically, it can be represented as (F - S)/S < 0. This implies that the foreign currency is trading at a discount in the forward market relative to the spot market.
Now, let's consider the scenario of hedging an accounts receivable. Suppose a company is expecting to receive a certain amount of foreign currency in the future. To hedge against potential exchange rate fluctuations, the company may choose to enter into a forward contract to sell the foreign currency at a predetermined forward rate.
If the forward discount exists, it means that the forward rate is lower than the spot rate, indicating that the market expects the foreign currency to depreciate in the future. In this case, if the company locks in the forward rate through a forward contract, it may face an opportunity cost because it could have received a higher amount of domestic currency by waiting until the future date and exchanging the foreign currency at the spot rate.
So, the forward discount can be seen as the potential cost of hedging an accounts receivable because it represents the difference between the higher amount the company could have received by not hedging and the lower amount it will receive by locking in the forward rate.
It's important to note that the decision to hedge an accounts receivable should consider various factors, including the company's risk tolerance, market expectations, and the potential impact of exchange rate fluctuations on the company's financial performance. The forward discount is just one aspect to consider in the overall hedging decision.
(b) To determine if there are any arbitrage opportunities, we need to compare the spot rate (St), the forward rate (Ft, T), and the interest rates (rt, T and r*t, T) for each currency. Arbitrage opportunities arise when it is possible to make a risk-free profit by exploiting discrepancies in the pricing of financial instruments across different markets.
To identify potential arbitrage opportunities, we can use the interest rate parity (IRP) condition, which states that the difference in interest rates between two currencies should be equal to the forward discount or premium on the currencies. Mathematically, IRP can be expressed as:
(rt, T - r*t, T) = (Ft, T - St)/St
If the actual interest rate differential between two currencies is different from the implied forward discount or premium, an arbitrage opportunity may exist. In such cases, one could make a risk-free profit by exploiting the mispricing.
Without specific data on the spot rates, forward rates, and interest rates for each currency, it is not possible to determine the presence of arbitrage opportunities. However, you can analyze the given data by plugging the values into the interest rate parity equation to check if the condition holds for each currency pair. If any discrepancies exist, one could exploit them by buying or selling the currencies in a manner that ensures a risk-free profit.
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Delayed marriages, fewer people in relevant age groups, and rising interest rates dampening demand for houses illustrates A) that more than one segment of the general environment may affect an industry. B) that the global environment is not as powerful an influence as thought. C) that macroeconomic forces dominate the general environment. D) that the competitive environment often has a strong influence on the general environment.
The delayed marriages, fewer people in relevant age groups, and rising interest rates dampening demand for houses illustrate that more than one segment of the general environment may affect an industry.
The scenario described highlights the impact of multiple factors from the general environment on the housing industry. Delayed marriages indicate a societal shift in the timing of major life events, which can influence the demand for housing. Fewer people in relevant age groups suggest a demographic trend that directly affects the target market for housing. Additionally, rising interest rates can impact the affordability and financing options for potential homebuyers.
This situation demonstrates that more than one segment of the general environment, such as sociocultural and demographic factors, as well as economic conditions, can collectively shape the industry landscape. The general environment comprises various external factors that influence an industry, including economic, social, technological, political, and ecological forces.
While macroeconomic forces may dominate in this particular scenario due to the significant impact of interest rates on housing demand, it does not imply that the competitive environment or global environment are irrelevant. In different situations, other segments of the general environment may exert a stronger influence. Thus, the correct answer is A) that more than one segment of the general environment may affect an industry.
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when calculating the expenses to run a business, there are things that can’t be changed, called constants, and things that can be changed, called...
When calculating the expenses to run a business, there are things that can't be changed, called constants, and things that can be changed, called variables.
Constants in business expenses refer to costs that remain fixed and typically do not fluctuate with changes in production or sales volume. Examples of constants include rent, insurance premiums, and salaries. These expenses are generally predetermined and remain consistent over a certain period. On the other hand, variables are expenses that can be adjusted or influenced by business decisions and external factors. Examples of variables include raw material costs, marketing expenses, and utility bills. Variables can vary based on business activities, market conditions, and management choices. Properly managing both constants and variables is crucial for maintaining financial stability and maximizing profitability in a business.
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TRUE/FALSE. one problem with job specialization is that many jobs are so specialized they become tedious which leads to increased motivation.
Answer:
True
Hope this helps and you understand
False. One problem with job specialization is that many jobs can become tedious and repetitive, leading to decreased motivation and job satisfaction.
When tasks become overly specialized and monotonous, employees may experience boredom and a lack of fulfillment, which can have a negative impact on their motivation and performance.False. One problem with job specialization is that many jobs can become tedious and monotonous over time, which can actually lead to decreased motivation. When individuals perform the same repetitive tasks continuously, they may experience boredom, lack of challenge, and reduced job satisfaction. This can ultimately impact their motivation levels and overall engagement in their work.
While job specialization can have its benefits, such as increased efficiency and expertise in specific tasks, it can also limit the variety and autonomy in a person's work. This lack of variety and autonomy can contribute to decreased motivation and job satisfaction. To mitigate this issue, organizations often implement strategies such as job rotation, enrichment, or providing opportunities for employees to engage in meaningful and challenging work beyond their specialized tasks.
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the Netflix Prize case demonstrates the following principles: (select all that apply; all correct answers must be selected for any credit) o the power of crowdsourced data science competitions o the limitations of group think o the incompetence of the Netflix data scientists o there are ways of sharing data that can be of great value to everyone o none of the above are principles demonstrated by the Netflix case
True. The Netflix Prize case demonstrates the power of crowdsourced data science competitions and the value of sharing data for innovation.
It does not showcase the limitations of groupthink or the incompetence of Netflix data scientists. The competition engaged a global community of participants, highlighting the potential of collective intelligence in solving complex problems. Additionally, Netflix's provision of a large dataset showcased the benefits of sharing data responsibly and securely for driving advancements in data science. Overall, the case emphasizes the significance of collaboration, data sharing, and open innovation in driving progress in the field of data science.
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QUESTION 1 In the 50 minutes tutorial, write no less than three sentences about Modigliani and Miller (M&M) propositions In your answer, copy the resources you use to answer 14510/P ALT+FN+F10 (Mac).
Modigliani and Miller (M&M) propositions are a set of theories developed by economists Franco Modigliani and Merton Miller in the 1950s. These propositions aim to provide insights into the relationship between a firm's capital structure and its market value. The propositions suggest that, under certain assumptions, the market value of a firm is independent of its capital structure and that the cost of capital is determined by the firm's underlying assets and business risks. These theories have had a significant impact on the field of corporate finance and have influenced discussions on optimal capital structure and the valuation of firms.
Resources:
Franco Modigliani and Merton H. Miller. "The Cost of Capital, Corporation Finance, and the Theory of Investment." The American Economic Review, Vol. 48, No. 3 (Jun., 1958), pp. 261-297.
Modigliani, F., & Miller, M. H. (1963). Corporate income taxes and the cost of capital: A correction. The American Economic Review, 53(3), 433-443.
Brealey, R. A., Myers, S. C., & Allen, F. (2017). Principles of Corporate Finance (12th ed.). McGraw-Hill Education.
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WRITE NOT LESS THAN 900 WORDS
1) Distribution networks comprise multiple combinations of transportation, facilities, and inventory configurations. The different configurations can have major implications on the business strategies of firms. That is why firms usually manage multiple distribution networks at the same time. How does the distribution strategy/plan of Jumia affects its distribution network configurations? (feel free to draw a diagram and develop your own score card for evaluation). Discuss in detail how Jumia manages its distribution cost tradeoffs, and how it justifies the costs with higher customer responsiveness rates?
Jumia, as an e-commerce platform operating in various African countries, implements a distribution strategy that significantly impacts its distribution network configurations. Jumia's distribution strategy focuses on achieving efficient and timely delivery of products to customers while managing costs effectively.
To manage its distribution network configurations, Jumia utilizes a combination of transportation modes, including partnerships with local delivery services, third-party logistics providers, and its own fleet of vehicles. The company establishes warehouses and fulfillment centers strategically located to optimize inventory management and reduce delivery times. Additionally, Jumia leverages technology, such as route optimization algorithms and real-time tracking systems, to streamline its distribution processes.
In terms of distribution cost tradeoffs, Jumia employs various measures. Firstly, it consolidates shipments to minimize transportation costs and reduce the number of individual deliveries. This approach enables Jumia to benefit from economies of scale. Secondly, the company strategically selects its warehouse locations to minimize transportation distances and costs. By positioning warehouses closer to customer clusters, Jumia can achieve faster and more cost-effective deliveries.
To justify these costs, Jumia focuses on enhancing customer responsiveness rates. The company invests in customer service infrastructure, providing reliable communication channels and prompt issue resolution. Jumia's distribution network configurations enable faster order processing and shorter delivery times, resulting in higher customer satisfaction and loyalty. By prioritizing customer responsiveness, Jumia aims to differentiate itself in the competitive e-commerce market and build a reputation for reliable and efficient service.
Overall, Jumia manages its distribution cost tradeoffs by optimizing transportation, facility, and inventory configurations. The company's distribution strategy aims to strike a balance between cost efficiency and customer responsiveness, ensuring timely deliveries while minimizing operational expenses. This approach supports Jumia's goal of providing a positive customer experience, which is essential for its long-term success in the e-commerce industry.
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which of the following statements regarding options is true? group of answer choices selling a put option gives you the obligation to buy the underlying asset if the option is exercised; buying a strangle lets you profit off low volatility selling a put option gives you the obligation to buy the underlying asset if the option is exercised; selling a butterfly spread lets you profit off high volatility buying a call option gives you the right to sell the underlying asset if the option is exercised; buying a strangle lets you profit off low volatility selling a call option gives you the obligation to buy the underlying asset if the option is exercised; buying a strangle lets you profit off high volatility buying a call option gives you the obligation to buy the underlying asset if the option is exercised; buying a butterfly spread lets you profit off low volatility
The statement "buying a call option gives you the right to sell the underlying asset if the option is exercised; buying a strangle lets you profit off low volatility" is true.
A call option gives the holder the right, but not the obligation, to buy the underlying asset at a specified price (strike price) within a specific time period. Buying a call option allows the investor to profit if the price of the underlying asset increases.
A strangle is an options strategy involving the purchase of both a call option and a put option with different strike prices. It is typically used when the investor expects high volatility or a significant price movement but is unsure of the direction. By buying a strangle, the investor can profit from large price swings without necessarily predicting the direction of the movement.
The other statements provided in the options are incorrect or mixed up. Selling a put option gives the seller the obligation to buy the underlying asset if the option is exercised, and selling a call option gives the seller the obligation to sell the underlying asset if the option is exercised. The profit potential of a strangle is not related to low volatility but rather to high volatility.
Among the given statements, only the statement "buying a call option gives you the right to sell the underlying asset if the option is exercised; buying a strangle lets you profit off low volatility" is true. Understanding the characteristics and strategies associated with options is important for investors to make informed decisions and manage risk effectively in the financial markets.
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which of the following is included on the schedule of cash payments? multiple choice question. a. accounts receivable b. prepaid rent c. inventory purchases d. depreciation expense
Option (C), Inventory purchases are included on the schedule of cash payments.
The schedule of cash payments is a report that outlines all the cash outflows a company expects to make during a particular period. It helps the company manage its cash flow by allowing it to plan for upcoming payments and ensure that it has sufficient funds available to cover those payments.
The items included on the schedule of cash payments are typically those that are expected to be paid in cash, such as purchases of inventory, payments to suppliers, and salaries and wages.
Out of the options given, only inventory purchases are an expense that a company would expect to pay for in cash. Accounts receivable, prepaid rent, and depreciation expense do not involve cash payments, as accounts receivable represent amounts owed to the company by its customers, prepaid rent represents a prepayment made by the company, and depreciation is a non-cash expense that represents the gradual loss of value of an asset over time.
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if an issuer wants to choose a syndicate directly to underwrite a new municipal bond issue, what type of underwriting is this? negotiated competitive fill-or-kill all-or-none
If an issuer wants to directly choose a syndicate to underwrite a new municipal bond issue, this type of underwriting is known as negotiated underwriting.
Negotiated underwriting is a type of underwriting process where the issuer of securities directly selects an underwriting syndicate to handle the sale and distribution of the securities. In this case, the issuer specifically chooses a syndicate to underwrite a new municipal bond issue, indicating a negotiated underwriting arrangement.
Competitive underwriting, on the other hand, involves a competitive bidding process where multiple underwriters submit proposals to the issuer, and the issuer selects the underwriter or syndicate offering the most favorable terms.
Fill-or-kill and all-or-none are different types of order instructions related to securities trading, and they are not directly applicable to the underwriting process.
In summary, if the issuer chooses a syndicate directly to underwrite a new municipal bond issue, it falls under the category of negotiated underwriting.
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Which of the following is a fixed payment to the hospital or healthcare facility based on the patient's admitting diagnosis and does not vary with the intensity of services provided?
Per diem
Per admission
Bundled payment
Retrospective payment
The fixed payment to a hospital or healthcare facility based on a patient's admitting diagnosis and that does not vary with the intensity of services provided is known as a- A. per diem payment.
What does this mean?This means that the healthcare facility will receive a predetermined amount of money for each day that the patient is admitted, regardless of the level of care they require during their stay.
This payment model is typically used for less complex cases where the patient's treatment plan is well-defined and predictable.
Per diem payments help to simplify the billing process for hospitals and healthcare facilities and can provide greater cost certainty for patients and insurance providers.
Hence, option A. is correct.
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Sunn og Frisk AS
produces closedrinks for those who exercise a lot and have in a
short time gained great popularity. The products are perceived as
good and nutritious. The calculus for one of their pr
Sunn og Frisk AS produces healthy drinks targeted towards individuals who engage in frequent exercise and have gained significant popularity within a short period. The products are highly regarded for their perceived quality and nutritional value.
The calculus for one of their pricing strategies would involve considering various factors. First, the company needs to assess the production costs involved in manufacturing the drinks, including raw materials, labor, packaging, and overhead expenses. They would also need to analyze the pricing strategies of their competitors to ensure they remain competitive in the market.
Furthermore, Sunn og Frisk AS should consider the perceived value of their products by their target market and the demand elasticity, which determines how sensitive customers are to changes in price. Pricing decisions should align with the company's marketing objectives and positioning within the market, taking into account factors such as brand reputation, target market income levels, and consumer preferences.
Ultimately, Sunn og Frisk AS would need to strike a balance between ensuring profitability and maintaining an attractive price point that reflects the perceived value of their healthy drinks to their target customers.
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the united nations sustainable development goals do not mention population growth, but most of the goals will affect population growth. which of the following statements correctly explains a link between the sustainable development goals and population growth? responses reducing infant mortality rates can lead to a desire to have a smaller family. reducing infant mortality rates can lead to a desire to have a smaller family. reducing poverty and hunger increases population growth as it makes larger families possible. reducing poverty and hunger increases population growth as it makes larger families possible. gender equality and empowering women leads to fewer women in the paid labor force. gender equality and empowering women leads to fewer women in the paid labor force. combating communicable diseases and improving maternal health means more potential mothers survive and have additional children. combating communicable diseases and improving maternal health means more potential mothers survive and have additional children. economic development strategies make it possible to support larger families.
The statement that correctly explains a link between the sustainable development goals and population growth is: Reducing infant mortality rates can lead to a desire to have a smaller family.
When infant mortality rates are high, parents often have more children to compensate for the likelihood of some children not surviving. However, when infant mortality rates decrease due to improved healthcare and child survival programs, parents are more likely to desire smaller families since they have greater confidence in their children's survival. This link between reducing infant mortality rates and smaller family size helps in controlling population growth.
Reducing infant mortality rates can lead to a desire to have a smaller family, which can contribute to addressing population growth. By improving child survival rates and ensuring the well-being of infants, parents are more likely to choose smaller family sizes, promoting sustainable development and population stabilization.
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what characteristics did communist and fascist dictatorships share
Communist and fascist dictatorships had some common characteristics, although
they were distinct ideologies with different underlying principles. Some of the shared characteristics include:Authoritarianism: Both communist and fascist dictatorships were characterized by authoritarian rule, where power was concentrated in the hands of a single leader or a small group, and dissent and opposition were suppressed.Totalitarianism: Both systems aimed to control and regulate all aspects of society, including the economy, politics, culture, and even individual thoughts and beliefs. They sought to create a unified and homogeneous society under the control of the state.
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a chart with many layers and levels of authority indicates a(n) organizational structure.
A chart with many layers and levels of authority indicates a hierarchical organizational structure. In a hierarchical structure, there is a clear chain of command with multiple levels of management and authority.
This structure is often represented visually through an organizational chart.
In a hierarchical organization, decision-making authority flows from the top-down, with power concentrated at the upper levels. Each layer of the hierarchy has a specific role and responsibility, and employees report to their immediate superiors. Communication generally follows a formal and predefined path within the organization.
The hierarchical structure allows for clear lines of authority and accountability. It provides a framework for organizing and managing large and complex organizations. However, it can also have limitations, such as slower decision-making processes and reduced flexibility and innovation.
Alternative organizational structures, such as flat structures or matrix structures, have emerged to address some of these limitations. Flat structures reduce the number of hierarchical levels, encouraging more direct communication and faster decision-making. Matrix structures combine elements of both hierarchical and project-based structures, allowing employees to work on cross-functional teams.
The choice of organizational structure depends on various factors, including the size, nature, and goals of the organization, as well as the industry and external environment in which it operates.
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Problem 1
Bank made a $200M loan at 12%. The bank wants to hedge the exposure by
entering a TRS with a counterparty. The bank promises to pay the interest on
the loan plus the change in market value in exchange for LIBOR+40bp. If after
one year the market value of the loan decreased by 3% and LIBOR is 11% what is
the net obligation of the bank?
Problem 2
A credit spread option has a notional of $100M with a maturity of one year.
The underlying security is a 8% 10-year bond issued by corporation XYZ. The
current spread is 150bp against 10- year Treasuries. The option is European type
with a strike of 160bp.
Assume that at expiration Treasury yield has moved from 6.5% to 6% and
the credit spread widened to 180bp.
The net obligation of the bank in this TRS arrangement is -$27,200,000. the outcome of the credit spread option is a payoff of $300,000.
Problem 1: To calculate the net obligation of the bank in the Total Return Swap (TRS), we need to determine the interest payment on the loan and the change in market value.
Loan amount: $200 million
Interest rate: 12%
Market value decrease: -3%
LIBOR rate: 11%
TRS rate: LIBOR + 40 basis points (0.40%)
First, let's calculate the interest payment on the loan:
Interest payment = Loan amount * Interest rate
Interest payment = $200,000,000 * 12% = $24,000,000
Next, let's calculate the change in market value of the loan:
Market value decrease = -3%
Change in market value = Loan amount * Market value decrease
Change in market value = $200,000,000 * -3% = -$6,000,000
Now, let's calculate the TRS payment based on LIBOR and the TRS rate:
TRS payment = Loan interest payment + Change in market value
TRS payment = $24,000,000 + (-$6,000,000) = $18,000,000
Since the TRS rate is LIBOR + 40 basis points, we need to calculate the LIBOR payment:
LIBOR payment = Loan amount * (LIBOR rate + TRS rate)
LIBOR payment = $200,000,000 * (11% + 0.40%) = $45,200,000
Finally, the net obligation of the bank is the TRS payment minus the LIBOR payment:
Net obligation = TRS payment - LIBOR payment
Net obligation = $18,000,000 - $45,200,000 = -$27,200,000
Therefore, the net obligation of the bank in this TRS arrangement is -$27,200,000.
Problem 2:
To calculate the outcome of the credit spread option, we need to determine the change in Treasury yield and the change in credit spread.
Notional: $100 million
Maturity: 1 year
Underlying security: 8% 10-year bond by corporation XYZ
Current spread: 150 basis points (1.50%)
Option type: European
Strike: 160 basis points (1.60%)
Treasury yield change: 6.5% to 6%
Credit spread change: 150bp to 180bp (1.50% to 1.80%)
First, let's calculate the change in Treasury yield:
Treasury yield change = Initial Treasury yield - Final Treasury yield
Treasury yield change = 6.5% - 6% = 0.5%
Next, let's calculate the change in credit spread:
Credit spread change = Final credit spread - Initial credit spread
Credit spread change = 180bp - 150bp = 30 basis points (0.30%)
Since the option is European, we only consider the final values for the Treasury yield and credit spread.
If the credit spread has widened to 180 basis points (1.80%) and the Treasury yield is 6%, we compare the credit spread to the strike:
If Credit spread > Strike:
Option payoff = Notional * Credit spread change
Option payoff = $100,000,000 * 0.30% = $300,000
Therefore, the outcome of the credit spread option is a payoff of $300,000.
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T/F. In project time management, the primary output of defining activities is a schedule management plan.
False.In project time management, the primary output of defining activities is the activity listFalse
The primary output of defining activities in project time management is the activity list, not the schedule management plan. The activity list includes all the specific activities that need to be performed to complete the project. The schedule management plan, on the other hand, is a separate output that is developed as part of the time management process and provides guidance on how the project schedule will be developed, monitored, and controlled.
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1. The actual information pertains to the month of June. As a part of the budgeting process, Dubai Company developed the following static budget for June. Dubai is in the process of preparing the flexible budget and understanding the results. Static Actual Flexible Budget Flexible Sales Results Items Variances Budget Volume Budget Variances Sales volume (in units) 18,000 ? ? ? 20,000 Sales revenues $900,000 ? ? ? $800,000 Variable costs 360,000 ? ? 360,000 Contribution margin 540,000 ? ? 440,000 240,000 ? ? 300,000 Fixed costs Operating Income $300,000 ? ? ? $140,000 Complete the above schedule and compute level 2 analysis of variances ? ?
The missing values in the schedule are as follows:
Static Budget Volume: 18,000 units
Actual Sales Revenues: $900,000
Flexible Budget Volume: 20,000 units
Flexible Budget Sales Revenues: $800,000
Flexible Budget Variable Costs: $360,000
Flexible Budget Contribution Margin: $440,000
Fixed Costs: $240,000
Operating Income in the Flexible Budget: $140,000
To compute the missing values and analyze the variances, we need to understand the relationship between the static budget and the flexible budget, as well as the actual results. Let's calculate each missing value step by step:
Static Budget Volume:
The given static budget provides the sales volume of 18,000 units for the month of June.
Actual Sales Revenues:
The actual sales revenues for June are given as $900,000.
Flexible Budget Volume:
The flexible budget volume is not explicitly provided, but we can infer it from the flexible budget sales revenues and the contribution margin. We know that the flexible budget sales revenues are $800,000, and the contribution margin is $440,000. The formula to calculate the flexible budget volume is:
Flexible Budget Volume = Flexible Budget Sales Revenues / Contribution Margin Ratio
The Contribution Margin Ratio is calculated as:
Contribution Margin Ratio = Contribution Margin / Actual Sales Revenues
Substituting the values:
Contribution Margin Ratio = $440,000 / $900,000 ≈ 0.4889
Flexible Budget Volume = $800,000 / 0.4889 ≈ 16,366 units
Rounded to the nearest whole number, the flexible budget volume is 16,366 units.
Flexible Budget Sales Revenues:
The given flexible budget sales revenues are $800,000.
Flexible Budget Variable Costs:
The flexible budget variable costs are equal to the static budget variable costs, which are given as $360,000.
Flexible Budget Contribution Margin:
The flexible budget contribution margin is calculated as the flexible budget sales revenues minus the flexible budget variable costs:
Flexible Budget Contribution Margin = Flexible Budget Sales Revenues - Flexible Budget Variable Costs
Flexible Budget Contribution Margin = $800,000 - $360,000 = $440,000
Fixed Costs:
The fixed costs are given as $240,000.
Operating Income in the Flexible Budget:
Operating Income in the Flexible Budget is calculated as the flexible budget contribution margin minus fixed costs:
Operating Income = Flexible Budget Contribution Margin - Fixed Costs
Operating Income = $440,000 - $240,000 = $200,000
Based on the calculations and completing the schedule, we have determined the missing values and analyzed the variances. The level 2 analysis of variances will involve comparing the flexible budget results with the actual results to identify the differences and understand the reasons behind them.
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ABC CO. has a ¥2,400 million payable in 1 year. The relevant market data include: The current spot exchange rate of $0.012N, 1 year forward exchange rate of $0.015/4, 1-year call option on yen with the strike price set at 130 cents for 100 yen that is selling for 3 cents per 100 yen. Interest rate in dollars is 10%, while interest rate in yen is 5%. a. Compute the dollar cost if ABC Co. decides to hedge using a forward contract. b. If ABC Co. decides to hedge using money market instruments, what action does it need to take? What would be future dollar cost in this case? c. If ABC, Co. decides to hedge using options, what would be the maximum future dollar cost? d. At what future spot exchange rate do you think ABC, Co. will be indifferent between the option and money market hedge? If ABC, Co. believes that the spot rate in 1 year will be $0.01/¥ and only considers forward and option hedge, which method should it use?
a. The dollar cost if ABC Co. hedges using a forward contract is $30 million.
b. ABC Co. needs to borrow yen and convert it into dollars. The future dollar cost would be $30.8 million.
c. The maximum future dollar cost of using options for hedging is $30.06 million.
d. ABC Co. will be indifferent between the option and money market hedge at a future spot exchange rate of approximately $0.0123/¥. ABC Co. should use the option hedge.
Determine the find what would be future dollar cost?a. To calculate the dollar cost using a forward contract, we multiply the amount payable (¥2,400 million) by the forward exchange rate ($0.015/4). Therefore, the dollar cost is ¥2,400 million × $0.015/4 = $30 million.
The forward exchange rate represents the rate at which a currency can be exchanged for another currency at a future date. In this case, ABC Co. wants to hedge its payable in yen by using a forward contract.
The payable amount in yen is ¥2,400 million. Multiplying this by the forward exchange rate of $0.015/4 gives the equivalent in dollars. Therefore, the dollar cost of the payable is $30 million.
b. To hedge using money market instruments, ABC Co. can borrow yen at a 5% interest rate and convert it into dollars using the spot exchange rate of $0.012N.
Since the payable amount is ¥2,400 million, ABC Co. borrows this amount in yen and converts it into dollars using the spot exchange rate. Therefore, the dollar cost is ¥2,400 million × $0.012N = $28.8 million.
However, ABC Co. needs to repay the yen loan at the end of the year, including the interest. The future yen repayment is ¥2,400 million + (¥2,400 million × 5%) = ¥2,520 million.
Converting the future yen repayment into dollars using the spot exchange rate of $0.012N, the future dollar cost is ¥2,520 million × $0.012N = $30.24 million.
Adding the initial dollar cost of $28.8 million, the total future dollar cost is $28.8 million + $30.24 million = $30.8 million.
c. To hedge using options, ABC Co. can purchase a 1-year call option on yen with a strike price of 130 cents for 100 yen, which is selling for 3 cents per 100 yen.
Since the payable amount is ¥2,400 million, ABC Co. needs to calculate the number of call options required. The number of options needed is equal to the payable amount divided by the option contract size: ¥2,400 million / 100 yen = 24 million options.
The cost of purchasing the call options is the number of options multiplied by the cost per option: 24 million options × 3 cents = $720,000.
The maximum future dollar cost occurs when the spot exchange rate is equal to the strike price of the call option (130 cents for 100 yen). Therefore, the future dollar cost is ¥2,400 million / 100 yen × 130 cents for 100 yen = $31.2 million.
However, ABC Co. can exercise the call options at the strike price of 130 cents for 100 yen, resulting in a lower future dollar cost of $30.06 million (¥2,400 million / 100 yen × 130 cents for 100 yen - $720,000).
d. To determine the future spot exchange rate at which
ABC Co. will be indifferent between the option and money market hedge, we need to compare the future dollar costs of both methods.
The future dollar cost using a forward contract is $30 million (as calculated in part a).
The future dollar cost using the money market hedge is $30.8 million (as calculated in part b).
The future dollar cost using options is $30.06 million (as calculated in part c).
ABC Co. will be indifferent between the option and money market hedge when the future spot exchange rate results in the same dollar cost for both methods.
Therefore, the future spot exchange rate at which ABC Co. will be indifferent is the rate at which the money market hedge yields a dollar cost of $30.06 million.
Let's denote the future spot exchange rate as $X/¥. We can set up the equation:
¥2,400 million × $X/¥ = $30.06 million
Solving for X, we find X ≈ $0.0123/¥.
Therefore, ABC Co. will be indifferent between the option and money market hedge when the future spot exchange rate is approximately $0.0123/¥.
Considering that ABC Co. believes the future spot rate will be $0.01/¥, it should use the option hedge since the estimated future spot rate is lower than the indifference point of $0.0123/¥.
The option hedge provides the opportunity to limit the future dollar cost to $30.06 million, which is lower than the expected dollar cost of $30.8 million with the money market hedge.
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Clap Off Manufacturing uses 3,100 switch assemblies per week and then reorders another 3,100. Assume the relevant carrying cost per switch assembly is $6.80 and the fixed order cost is $530.
Calculate the carrying costs. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
Carrying costs $ _____
Calculate the restocking costs. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
Restocking costs $ _____
Calculate the economic order quantity. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Economic order quantity _____
Calculate the EOQ number of orders per year. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Number of orders per year _____
The carrying costs in the Clap Off Manufacturing is $2,471, its restocking costs are $117,882, economic order quantity is 727.20, and the number of orders per year is 222.53.
Carrying costs are calculated by multiplying the average inventory level by the carrying cost per unit. Divide the economic order quantity (EOQ) by 2 to get the average inventory level. Given that the relevant carrying cost per switch assembly is $6.80, the carrying costs can be calculated as follows:
The carrying cost is computed as:
Carrying costs = Average inventory level * Carrying cost per unit
Average inventory level = EOQ / 2
To found the restocking costs, we must first determine the number of orders placed per year and then multiply that figure by the constant order cost of $530.
First calculate the carrying costs:
EOQ = √((2 × Demand × Order cost) / Carrying cost per unit)
= √((2 × 3100 × $530) / $6.80)
≈ 727.20
Then the Average inventory is:
Average inventory level = EOQ / 2
≈ 727.20 / 2
≈ 363.60
Then the carrying cost would be:
Carrying costs = Average inventory level * Carrying cost per unit
Carrying costs ≈ 363.60 * $6.80
Carrying costs ≈ $2,471.68
Therefore, the carrying costs are approximately $2,471.
Now, calculate the restocking costs:
Number of orders per year = (Demand per week * 52 weeks) / EOQ
= (3100 × 52) / 727.20
≈ 222.53
Restocking costs = Number of orders per year * Fixed order cost
≈ 222.53 * $530
≈ $117,881.90
Therefore, the restocking costs are approximately $117,882.
Finally, calculate the economic order quantity (EOQ):
EOQ = √((2 * Demand * Order cost) / Carrying cost per unit)
= √((2 * 3100 * $530) / $6.80)
≈ 727.20
Therefore, the economic order quantity is approximately 727.20.
Then, Calculate the number of orders per year
Number of orders per year = (Demand per week * 52 weeks) / EOQ
= (3100 × 52) / 727.20
≈ 222.53
Therefore, the number of orders per year is approximately 222.53.
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