Solution: Annual Demand
25000
No. of days
360 days
Selling price
$ 350.00
mark up
20%
Annual holding cost
$
5.50 per unit
Cost to process an order
$
25.00
Days to complete an order
10 days
Holding Cost
$ 1,540.00
Part 1
EOQ =SQRT(2*D*S/H)
EOQ =SQRT(2*2500
Tax rate
Discount rate
Computation of Net Present Value :
Year
Cash outflows:
Cost
NWC
Cash Inflows:
savings
Less: Depreciation
Profit before tax
Less: Taxes
Profit after tax
Add: Depreciation
Cash flows after tax
Salvage value
Total cashflows
Net Present
Computation of the activity cost of converting the raw materials into 50 fireplace inserts
No. of units in a batch
No. of pounds in a
unit
Activity
Activity cost
Machine setup
$50.00 per batch
Movement
15.00 per batch move
0.10 per pound
Drilling
4.00 per
Growth rate
Cash Outflows:
Billboard and magazine
Training new employees
Cost of decoration
Total cash outflows
Cash Inflows:
Gross margin
5%
$
$
$
$
9,000,000
3,000,000
10,000,000
(22,000,000)
$
30,000
Net Present value = CF*1/(1-r)
r=(1+g)/(1+Discount r
Stock price
Inventory balance
Expenses (excluding COGS)
Shares outstanding
Average issue price of shares
Gross margin %
Interest rate
TIE ratio
Inventory turnover
Current ratio
Quick ratio
Fixed asset turnover
Solution :
The difference between current rat
Solution :
a.
b.
c.
d.
To maximize profit, Yasiel should produce where MR = MC. BecauseMC =
$5, we need to find the level of output in which MR = $5. BecauseMR = the
change in TRdivided by the change in Q,we can calculate that MR = $5 for the
third unit o
Sweetie Pie Foods, Inc.
Income Statement
Year Ended June 30, 20X7
Revenues:
Net sales revenue ($733,000 less returns
of $22,000 and discounts of $10,000)
Expenses:
Cost of goods sold.
Selling expenses.
General expenses
Income tax expense
Total expenses.
I
a. Scenario 1: (Held for trade)
Dividend income to be recognized for the year 2012 = $20 million *10% = $2 million
Cost of the 10% investment = $48 million
Market value of the investment = $480 Million *10% = $48 million
Hence on the balance sheet investm
Production
Tax Rate
Cost of capital
1200000 cakes
34%
10%
Computation of Net Present Value :
Year
Cash Outflows :
Working capital
Cash Inflows :
Revenues
Less: rawmaterials
Less: labor costs
Less: Depreciation
Profit before tax
Tax
Profit after tax
Add: d