Consider the following projects, for a firm using a discount rate of 10%: Project NPV IRR PI A $200,001 11% 1.14 B $200,000 10.2% 1.04 C $60,000 20.1% 1.61 D $(235,000) 9% .95 If the projects are mutually exclusive, which, if any, project(s) should the firm accept?
a. Project A b. Project B c. Project D d. Projects B and D e. Projects A, B and C

Answers

Answer 1

Based on the information given, the firm should only accept Project A as it has the highest NPV (Net Present Value) of $200,001. This means that Project A will generate the highest expected value of cash flows for the firm when compared to the other projects.

Project B has a lower NPV of $200,000 and a lower IRR (Internal Rate of Return) of 10.2%, which means that it is less efficient in generating returns for the firm when compared to Project A.

Project C has a lower NPV of $60,000 and a higher IRR of 20.1%, but it is still less attractive than Project A due to its lower expected value of cash flows.

Project D has a negative NPV of $(235,000) and a low PI (Profitability Index) of .95, which means that it will result in a net loss for the firm and should not be accepted.

Therefore, the answer is a. Project A.

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Answer 2

Based on the information given, the firm should only accept Project A as it has the highest NPV (Net Present Value) of $200,001. This means that Project A will generate the highest expected value of cash flows for the firm when compared to the other projects.

Project B has a lower NPV of $200,000 and a lower IRR (Internal Rate of Return) of 10.2%, which means that it is less efficient in generating returns for the firm when compared to Project A.

Project C has a lower NPV of $60,000 and a higher IRR of 20.1%, but it is still less attractive than Project A due to its lower expected value of cash flows.

Project D has a negative NPV of $(235,000) and a low PI (Profitability Index) of .95, which means that it will result in a net loss for the firm and should not be accepted.

Therefore, the answer is a. Project A.

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Related Questions

in the short run: multiple choice a firm cannot increase or decrease at least one of its inputs. output cannot be changed. the price of output is fixed. all of these are true.

Answers

in the short run "a firm cannot increase or decrease at least one of its inputs". The correct answer is A.

In the short run, a firm cannot adjust all of its inputs, meaning it is operating under constraints. At least one input, usually capital, is fixed in the short run, so the firm cannot easily increase or decrease production in response to changing market conditions. As a result, output is constrained and the price of output may fluctuate based on supply and demand dynamics.

Option A is answer.

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a strategy that promotes a superior alignment between the organization and its environment and the achievement of strategic goals is a(n) .

Answers

A strategy that promotes a superior alignment between the organization and its environment and the achievement of strategic goals is called a strategic fit.

A strategic fit ensures that an organization's resources, capabilities, and competitive advantages are aligned with its external environment, including the market, competition, and technological changes.

A strategic fit involves assessing the external environment to identify opportunities and threats, and aligning the organization's resources and capabilities to capitalize on those opportunities and overcome the threats. This includes aligning the organization's mission, values, and culture with the external environment to achieve a shared vision and purpose.

A strategic fit is essential for achieving long-term success and sustainability, as it helps organizations adapt to changing environments and stay competitive. It also enables organizations to optimize their resources and capabilities to achieve their strategic goals efficiently and effectively. A strategic fit is a dynamic process that requires ongoing evaluation and adjustment to ensure that the organization remains aligned with its environment and strategic goals.

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if a salesperson used so much industry jargon that a prospective buyer was unable to understand the message properly, the communication would fail because of

Answers

Answer: Barrier in Communication.

If a salesperson used so much industry jargon that a prospective buyer was unable to understand the message properly, the communication would fail because of ineffectiveness or a lack of clarity. This may lead to misunderstandings, confusion, and frustration among buyers and seller experiencing failure to make a sale or establish a relationship with the prospective buyer, ultimately resulting in the buyer losing interest, in the product or service being offered.  This is due to the overuse of industry-specific terms and jargon, which can make it difficult for the buyer to comprehend the information being presented. To improve communication, the salesperson should use simpler language, avoid excessive jargon, and ensure that their message is clear and easy to understand.

What is Effective Communication? Effective communication involves using language that is clear and concise, and avoiding the use of jargon or technical terms that are unfamiliar to the listener.

In short, the communication will be effective only if the listener is able to comprehend what the speaker is trying to communicate or else communication would be ineffective due to a lack of understanding .

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in order for a firm to lower costs, it must ______. multiple choice question. grow increase risks lower its expectations lower profits

Answers

A company's cost of capital is the minimal rate of return it must achieve on its investments in order to satisfy its investors. A business must decrease profits in order to reduce costs. Hence (d) is the correct option.

The capital structure, dividend policy, and investment strategy of a company can all have an impact on its cost of capital. The cost a company incurs to produce a further unit of a good or service is known as the marginal cost. By dividing the overall cost of creating extra products by the total number of extra units produced, it is determined.

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in order for a firm to lower costs, it must ______. .

a. grow

b. increase risks

c. lower its expectations

d. lower profits

In order for a firm to lower costs, it must "lower its expectations."

Business is the practice of making one's living or making money by producing or buying and selling products. It is also "any activity or enterprise entered into for profit."A firm is a for-profit business, usually formed as a partnership that provides professional services, such as legal or accounting services. The theory of the firm posits that firms exist to maximize profits.

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why does a government policy to reduce the supply of illegal drugs greatly increase the price of illegal drugs? how might this policy result in more crime? might a government policy to reduce the demand for drugs have a different effect?

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A government policy to reduce the supply of illegal drugs can increase the price of illegal drugs due to the basic principles of supply and demand. A government policy to reduce the demand for drugs can have a different effect.

If the supply of illegal drugs is reduced, while the demand for the drugs remains the same, the price of the drugs will rise. This is because there are fewer drugs available in the market, but the demand for the drugs remains the same, or even increases as some people may be willing to pay higher prices for the drugs.

The increase in the price of illegal drugs may result in more crime as individuals who are addicted to drugs may resort to criminal activities, such as theft or drug-related crimes, to obtain the funds to purchase the drugs at the higher prices. Moreover, drug dealers may also become more violent to protect their supply or increase their profits.

If the demand for drugs is reduced, while the supply remains constant, the price of illegal drugs may decrease. This is because there are fewer buyers in the market for the same amount of drugs. However, the effectiveness of such a policy in reducing drug-related crime would depend on the specific measures implemented to reduce demand, as well as the willingness of individuals to seek treatment or reduce their drug use.

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In a business process, resources are ________.
A) people or computer applications that are assigned to roles
B) collections of procedures and activities
C) the total number of points of work that can be accomplished in each scrum period
D) collections of related tasks that receive inputs and produce outputs

Answers

A) people or computer applications that are assigned to roles. In a business process, resources refer to the individuals or computer applications that are assigned to specific roles to carry out the activities and procedures involved in the process.

These resources can be both human and technological, and they work together to ensure the successful execution of the business process. Computer applications can play a significant role in optimizing business processes, streamlining workflows, and improving efficiency.

Resources in a business process can include both human resources (people) and technological resources (computer applications). These resources are assigned to specific roles to help facilitate and complete tasks within the process.

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the demand curve suggests that an auto manufacturer will sell 20,000 mercedes-benz m-class vehicles when they are priced at $50,800, but when the price is reduced to $45,000, that quantity will increase to 27,000 units. what is the resulting elasticity? price elasticity

Answers

The price elasticity of demand can be calculated using the following formula:

E = (% change in quantity demanded)/(% change in price)

First, let's calculate the percentage change in quantity demanded:

% change in quantity demanded = ((new quantity - old quantity) / old quantity) x 100

% change in quantity demanded = ((27,000 - 20,000) / 20,000) x 100

% change in quantity demanded = 35%

Next, let's calculate the percentage change in price:

% change in price = ((new price - old price) / old price) x 100

% change in price = ((45,000 - 50,800) / 50,800) x 100

% change in price = -10.16%

Using these values, we can calculate the price elasticity of demand:

E = (% change in quantity demanded)/(% change in price)

E = 35% / -10.16%

E = -3.44

Since the elasticity is greater than 1, we can conclude that the demand for Mercedes-Benz M-Class vehicles is price elastic, meaning that a decrease in price leads to a proportionally larger increase in quantity demanded.

what is the beta of a portfolio that consists of the following? security $ invested beta a $ 2,000 1.38 b 5,000 .47 c 9,000 1.70 d 4,000 1.08 multiple choice 1.18 1.22 1.24 1.32 1.37

Answers

The beta of the portfolio is approximately 1.24, which corresponds to the third option in the multiple-choice list (1.24). The Portfolio beta is 1.2365.

To calculate the beta of a portfolio, we need to first calculate the weighted average beta of each security in the portfolio.

We can do this by multiplying each security's beta by its proportion of the total portfolio value:
Security A: $2,000/$20,000 = 0.10 or 10% of portfolio value; 1.38 x 0.10 = 0.138
Security B: $5,000/$20,000 = 0.25 or 25% of portfolio value; 0.47 x 0.25 = 0.118
Security C: $9,000/$20,000 = 0.45 or 45% of portfolio value; 1.70 x 0.45 = 0.765
Security D: $4,000/$20,000 = 0.20 or 20% of portfolio value; 1.08 x 0.20 = 0.216
Next, we add up the weighted beta values to get the beta of the overall portfolio:
0.138 + 0.118 + 0.765 + 0.216 = 1.237

Therefore, the beta of the portfolio is 1.24 (rounded to the nearest hundredth).

The answer to the multiple-choice question is C) 1.24.

To calculate the beta of a portfolio, we need to find the weighted average of the individual security betas based on their proportion of the total investment.

2. Calculate the proportion of each security in the portfolio:
Proportion A = $2,000 / $20,000 = 0.1
Proportion B = $5,000 / $20,000 = 0.25
Proportion C = $9,000 / $20,000 = 0.45
Proportion D = $4,000 / $20,000 = 0.2

3. Calculate the weighted average beta:

Portfolio beta = (Proportion A * Beta A) + (Proportion B * Beta B) + (Proportion C * Beta C) + (Proportion D * Beta D)
Portfolio beta = (0.1 * 1.38) + (0.25 * 0.47) + (0.45 * 1.70) + (0.2 * 1.08)
Portfolio beta = 0.138 + 0.1175 + 0.765 + 0.216
Portfolio beta = 1.2365

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describe each of the five objectives of the phoenix project. what level of effort would be required to accomplish these objectives?

Answers

The five objectives of improvement of the Phoenix Project are to improve:

Business/IT Alignment, Project Delivery Efficiency, IT Operations Efficiency, Continuous Improvement and Security and Compliance.

What are the objectives of the Phoenix Project

The five objectives of the Phoenix Project are to improve the following areas:

1. Business/IT Alignment:

Ensuring that IT projects and resources are aligned with the organization's strategic goals, requiring effective communication and collaboration between business and IT teams.

2. Project Delivery Efficiency:

Streamlining the delivery of IT projects by eliminating bottlenecks, adopting agile methodologies, and utilizing automation where appropriate. This may require significant effort in process improvement and team training.

3. IT Operations Efficiency:

Enhancing the performance and reliability of IT systems by implementing best practices in areas like incident management, monitoring, and capacity planning. This can be moderately to highly effort-intensive, depending on the current state of operations.

4. Continuous Improvement:

Fostering a culture of continuous learning and improvement within the organization, which may involve regular reviews, feedback, and training. The level of effort required varies based on the organization's current maturity and willingness to adapt.

5. Security and Compliance:

Ensuring that IT systems and processes comply with relevant regulations and are secure from potential threats. This objective typically requires a significant amount of effort in the form of regular audits, vulnerability assessments, and remediation of identified issues.

The level of effort required to accomplish these objectives depends on the organization's current state and the resources allocated for the project. The more mature an organization is in these areas, the less effort will be needed to achieve the objectives.

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with a simple delivery contract in which the seller is a merchant, which party sustains the loss if, through no fault of either party, the goods are destroyed through fire prior to delivery to the buyer?

Answers

In a simple delivery contract where the seller is a merchant, the risk of loss for the goods typically passes from the seller to the buyer upon delivery. However, if the goods are destroyed through fire prior to delivery to the buyer, the allocation of risk and responsibility for the loss will depend on the terms of the contract and the applicable laws.

If the contract contains a specific provision allocating the risk of loss in the event of unforeseen circumstances, such as fire or other events beyond the control of either party, the terms of the contract will govern the allocation of the loss. For example, if the contract provides that the risk of loss remains with the seller until delivery to the buyer, and the goods are destroyed by fire before delivery, then the seller would bear the loss.

However, in the absence of any specific provision in the contract, the general rule under the Uniform Commercial Code (UCC) is that the risk of loss passes to the buyer once the goods are delivered to the carrier. In this case, if the goods were destroyed by fire while in transit, the loss would typically be borne by the buyer.

It is important to note that the UCC allows parties to modify the default allocation of risk through their contract. Therefore, it is always advisable to carefully review the terms of the contract and consult with legal counsel if necessary to understand the parties' respective obligations and liabilities in the event of loss or damage to the goods.

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rules and regulations, rather than culture or rewards, would be used for strategic control at which type of company? group of answer choices software developer stock brokerage firm manufacturer of mass produced products high tech research facility

Answers

A firm manufacturer of mass-produced products is most likely to use rules and regulations for strategic control. Therefore option c is correct.

Mass-produced product manufacturing companies have a standardized & routine production process. The emphasis is on minimizing variation in the production process to maintain consistency in the quality of the products produced.

These companies also tend to have a large workforce, making it difficult to manage and control employees' activities without strict guidelines.

Rules and regulations serve as a mechanism for controlling employees' activities to ensure that they adhere to the production process's prescribed guidelines.

For instance, a manufacturer of mass-produced products like a car company will have strict rules and regulations in place to ensure that the assembly line workers follow a standardized process and do not deviate from the prescribed steps.

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The complete question is-

rules and regulations, rather than culture or rewards, would be used for strategic control at which type of company?

CHOOSE AMONG THESE-

A. software developer

B. stock brokerage

C. firm manufacturer of mass produced products

D. high tech research facility

Horizon is using a combination of labour and capital to produce a good. With this combination, the marginal product of labour is 180 and the marginal product of capital is 60. Wages cost €9 an hour and capital costs €4.
1. What is the current value of the firm’s marginal rate of technical substitution? [5]
2. If labour is on the horizontal axis, what is the slope of the isocost line? [5]
3. Is Horizon using too much capital, too much labour or just the right amount of both to minimise costs of production? Explain your answer. [15]

Answers

The current value of the firm’s marginal rate of technical substitution (MRTS) is 3. This is calculated by dividing the marginal product of labour (180) by the marginal product of capital (60), which gives us 3.

If labour is on the horizontal axis, the slope of the isocost line is -4.1. This is calculated by dividing the cost of capital (4.1) by the cost of labour (9).

Horizon is using just the right amount of both labour and capital to minimise costs of production. This is because the MRTS (3) is equal to the slope of the isocost line (-4.1). This suggests that Horizon is using the optimal combination of labour and capital to minimise costs.

If the MRTS was greater than the slope of the isocost line, it would suggest that the firm is using too little capital and too much labour, and vice versa. Therefore, Horizon is using the optimal combination of resources to minimise costs.

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The company you work for has developed a new credit scoring model to be used to make acceptance and pricing decisions for all of their loan applicants.
The credit score (S) is calculated as:
S = 5 – 5*(D/A) – 2*LTV + 0.5(Income/10,000) + 1.5*(if Revenue Insurance = yes)
where: D/A = debt-to-asset ratio
LTV = loan-to-value (loan amount/value of project)
Revenue Insurance = 1 if the applicant has revenue insurance, 0 otherwise
You accept the loan if S > 5.
If the loan is accepted, you offer the following interest rate (r):
r = Prime Rate + (7 – S)%.
The current Prime Rate = 6.5%.
Given the credit scoring model outlined above, would you accept the following loan application, and if so at what interest rate?
Applicant Name John Smith
D/A 0.5
Income 80,000
Loan Amount 90,000
Value of Project 120,000
Revenue Insurance? Yes
LTV S Accept or reject loan? r

Answers

According to the given credit scoring model, John Smith's credit score (S) is calculated to be 4.75, which is less than the required score of 5 for loan acceptance. Therefore, the loan should be rejected. If it were accepted, the interest rate (r) would have been Prime Rate + (7-S)% = 6.5% + (7-4.75)% = 8.75%.


To calculate John Smith's credit score (S), we use the given formula: S = 5 – 5*(D/A) – 2*LTV + 0.5(Income/10,000) + 1.5*(if Revenue Insurance = yes).


Plugging in the values given in the loan application, we get:
S = 5 - 5*(0.5) - 2*(90,000/120,000) + 0.5*(80,000/10,000) + 1.5*(1) = 4.75


Since the required credit score for loan acceptance is 5, the loan should be rejected.

If the loan were accepted, we would use the formula: r = Prime Rate + (7-S)%, where the current Prime Rate is given as 6.5%. Plugging in the calculated value of S, we get:
r = 6.5% + (7-4.75)% = 8.75%.

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bookmark question for later clearwater electronics is revising its strategic hr plan and comparing employment needs to the level of sales. the company has recently seen a 30 percent increase in sales, and the salespeople say that they anticipate an increase soon of 70 percent. however, the hr director, who oversees the hr planning process, does not believe the company will need to hire 70 percent more employees to meet the projected sales numbers. how can a simple linear regression, as part of the hr planning process, help the hr director make a more accurate determination of projected staffing needs?

Answers

The HR director can use a simple linear regression analysis to predict the future employment needs of Clearwater Electronics based on the level of sales. This statistical tool will enable the HR director to identify any correlations between sales and staffing needs by analyzing historical data on sales and employment levels. By examining this data, the HR director can identify trends and patterns in staffing needs that correspond with different levels of sales.

Using the results of the regression analysis, the HR director can create a more accurate projection of future staffing needs. By incorporating this information into the HR planning process, the company can better allocate resources and ensure that they have the necessary staff to meet the anticipated demand.

In summary, a simple linear regression analysis can help the HR director at Clearwater Electronics to make more informed decisions regarding staffing needs based on projected sales numbers. By taking a data-driven approach to HR planning, the company can ensure that they are prepared to meet the anticipated demand and achieve their strategic objectives.

Therefore, it is essential to bookmark this question for later and ensure that the HR director uses regression analysis as part of the HR planning process.

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Agro International has a foreign subsidiary, which requires $200K cash every month. It uses a wire service for the cash transfer.
The cost of wire transfer is $100.
In order to send cash to its subsidiary, the Agro has to liquidate part of its securities portfolio which generates 12% annual return.
How many wire transfers PER YEAR should Agro make?

Answers

Agro International must make 24 wire transfers per year to provide the $200K cash to its subsidiary.

The cost of each wire transfer is $100, so the total cost of the transfers is $2,400 per year. To cover the cost of the transfers, Agro must liquidate part of its securities portfolio that generates a 12% annual return.

Therefore, Agro must liquidate a portion of its securities portfolio that is worth $20,000 to cover the cost of the transfers. This amount of liquidation will reduce Agro's annual return by 1.2%, since 12% of $20,000 is $2,400.

The total cost of the wire transfers is a small price to pay for the ability to transfer the necessary funds to its foreign subsidiary.

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which of the following are true of strategic long-range plans? multiple select question. they are usually stated in rather broad terms. they are statements detailing steps to take to achieve a company's organizational goals. they usually span one year or less. they are the financial plans of an organization for the coming year or other planning period.

Answers

Of the given options, the true statements about long-range strategic plans are that they are usually stated in rather broad terms and they are statements detailing steps to take to achieve a company's organizational goals.

Strategic long-range plans are designed to provide a company with a clear direction for the future. They are typically focused on the long-term success of an organization and are often developed within a timeframe of three to five years or even longer.

These plans take into account the company's vision, mission, and values, and they provide a roadmap for achieving the company's strategic objectives. Strategic long-range plans are critical for organizations because they help leaders to define the company's priorities, allocate resources effectively, and identify opportunities for growth.

These plans are not financial plans for the coming year or other planning periods, as those are typically more short-term in nature. Overall, long-range strategic plans are essential for any organization that wants to be successful in the long run.

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1. Suppose IBM is currently selling for $100 per share, the one period risk free rate is 8% and IBM pays no dividends over the period. Consider a one period European call on IBM with K=$50. a. IBM will either go up by 20% or down by 5%. What is the value of the call one period from expiration? b. Now suppose IBM will go up by 40% or down by 40%. What is the value of the call one period from expiration? Explain any change or lack of it relative to part a). c. Now suppose IBM will go up by 40% or down by 60%. What is the value of the call one period from expiration? Explain any change or lack of it relative to parts a) and b)

Answers

a) If IBM will either go up by 20% or down by 5%, then we can calculate the expected value of the stock price at expiration as follows:

Expected stock price = (0.5 x 1.20 x $100) + (0.5 x 0.95 x $100)

= $107.50

The call option will only be exercised if the stock price is above the strike price of $50, so the payoff at expiration is:

Payoff = Max($107.50 - $50, 0) = $57.50

The present value of this payoff is:

PV = $57.50 / (1 + 0.08) = $53.24

Therefore, the value of the call one period from expiration is $53.24.

b) If IBM will go up by 40% or down by 40%, then the expected stock price at expiration is:

Expected stock price = (0.5 x 1.40 x $100) + (0.5 x 0.60 x $100)

= $100

The call option will only be exercised if the stock price is above the strike price of $50, so the payoff at expiration is:

Payoff = Max($100 - $50, 0) = $50

The present value of this payoff is:

PV = $50 / (1 + 0.08) = $46.30

The value of the call option in this case is lower than in part a) because the stock price has a higher variance, which increases the probability of the stock price being below the strike price at expiration.

c) If IBM will go up by 40% or down by 60%, then the expected stock price at expiration is:

Expected stock price = (0.5 x 1.40 x $100) + (0.5 x 0.40 x $100)

= $90

The call option will only be exercised if the stock price is above the strike price of $50, so the payoff at expiration is:

Payoff = Max($90 - $50, 0) = $40

The present value of this payoff is:

PV = $40 / (1 + 0.08) = $37.04

The value of the call option in this case is lower than in parts a) and b) because the downside risk is greater, which increases the probability of the stock price being below the strike price at expiration.

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Suppose your company is expected to grow at a constant rate of 6 percent long into the future. In addition, its dividend yield is expected to be 8 percent. If your company expects to pay a dividend equal to $1.06 per share at the end of the year, what is the value of your firm's stock?

Answers

The value of the firm's stock is $13.25.

We can use the Gordon Growth Model to find the value of the firm's stock:

Value of Stock = Dividend / (Cost of Equity - Growth Rate)

where:

Dividend = $1.06 (the expected dividend per share at the end of the year)

Growth Rate = 6% (the expected constant growth rate)

Cost of Equity = Dividend Yield + Growth Rate

Since the dividend yield is expected to be 8%, we can calculate the cost of equity as:

Cost of Equity = 8% + 6% = 14%

Now we can substitute these values into the formula:

Value of Stock = $1.06 / (0.14 - 0.06) = $1.06 / 0.08 = $13.25

Therefore, the value of the firm's stock is $13.25.

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nittany garments buys fleece jackets from big ten sports apparel, inc., embroiders them with penn state organizational logos, and sells them to the student population. the annual demand for these embroidered jackets is 1,000; the annual holding cost is $1.00 per unit, and the ordering cost is $15 per order. when placing a restocking order, what (approximate) quantity should nittany garments order so as to minimize their holding and ordering costs?

Answers

The expenses incurred by holding inventory that has not yet sold are known as holding costs. Along with ordering and shortage fees, these expenses make up ordering costs.

How much does ordering cost?

Ordering costs are the costs your business pays to order and receive the goods it keeps on hand. These ordering costs may consist of shipping charges, unforeseen transportation costs, inspection fees, and other costs required to purchase inventory goods.

Are ordering costs and holding costs equivalent?

Ordering costs are inversely related to holding costs. Thus, if one of the two costs increases, the other cost will decrease. If the cost of ordering is lower, the corporation may place fewer orders during a given period of time.

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Melissa Inc. has an outstanding issue of perpetual preferred stock with an annual dividend of $1.00 per share. If the required return on this preferred stock is 5.24%, at what price should the stock sell? (Multiple Choice) a. $16.46 b. $11.69 c. $19.08 d. $13.69 e. $15.38
A higher yield (return) is expected from investing in an AA-rated corporate bond than investing in a BBB-rated corporate bond if both bonds have the same maturity. True/False) a

Answers

The price at which Melissa Inc.'s perpetual preferred stock should sell is $19.08.(C)

To calculate the price of the perpetual preferred stock, use the formula:

Price = Annual Dividend / Required Return

Step 1: Identify the annual dividend and required return.
Annual Dividend = $1.00
Required Return = 5.24% (0.0524 as a decimal)

Step 2: Use the formula to calculate the price.
Price = $1.00 / 0.0524 = $19.08

Thus, the stock should sell at $19.08, which corresponds to option (C).

Regarding the statement about bond yields, it is True. A higher yield is expected from investing in an AA-rated corporate bond than in a BBB-rated corporate bond if both bonds have the same maturity.

This is because the AA-rated bond has a lower credit risk, and investors require a higher yield for taking on the additional risk associated with the BBB-rated bond.

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The concept of adverse selection helps to explain all of the following except:
A) why firms are more likely to obtain funds from banks and other financial intermediaries, rather than from the securities markets
B) why indirect finance is more important than direct finance as a source of business finance
C) why direct finance is more important than indirect finance as a source of business finance
D) why the financial system is so heavily regulated

Answers

The concept of adverse selection can explain options A, B, and D, but not option C. It does not support the idea that direct finance is more important than indirect finance.

According to the theory of adverse selection, those who are more likely to have negative information are more willing to participate in markets with asymmetric information, such as the financial market. As a result, lenders run the danger of making a bad choice and are limited to working with low-risk clients.

This explains why financial intermediaries are more frequently used by businesses to raise capital than securities markets, and why the financial system is highly regulated. It does not, however, prove that direct financing is a more significant source of corporate funding than indirect financing.

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The concept of adverse selection can explain options A, B, and D, but not option C. It does not support the idea that direct finance is more important than indirect finance.

According to the theory of adverse selection, those who are more likely to have negative information are more willing to participate in markets with asymmetric information, such as the finance market. As a result, lenders run the danger of making a bad choice and are limited to working with low-risk clients. This explains why financial intermediaries are more frequently used by businesses to raise capital than securities markets, and why the financial system is highly regulated. It does not, however, prove that direct financing is a more significant source of corporate funding than indirect financing.

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printing a brand's web address on a shopping bag used to carry merchandise sold at a brick-and-mortar store is a form of:

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Printing a brand's web address on a shopping bag used to carry merchandise sold at a brick-and-mortar store is a form of promotional marketing.

Promotional marketing Definition

Promotional marketing is designed to spread knowledge about a brand, product, or service to a wide audience with the aim of increasing brand awareness and sales. Its purpose is to inspire a potential customer to take action.

Promotional marketing is part of the famous marketing mix that refers to a group of tactics that a company chooses to take a product or service to market.

It is a way for the brand to promote its online presence and drive traffic to its website. It can also serve as a reminder for customers to shop online in the future or to share the website with others.

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true or false? any component that, if it fails, could interrupt business processing is called a single point of failure (spof).

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True. Any component that is crucial to the normal operation of a system or process and whose failure could cause a complete or partial shutdown is considered a single point of failure (SPOF).

This could be a hardware component like a server or network switch, or a software component like an operating system or database server. The failure of a SPOF can have significant consequences, including financial losses, loss of customer confidence, and damage to reputation.

Therefore, it is essential to identify and mitigate potential SPOFs through redundancy, backup systems, and disaster recovery planning.

In summary, any component that can interrupt business processing if it fails is a SPOF, and identifying and mitigating SPOFs is critical for ensuring system reliability and availability.

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your uncle is going to give you $1,500 at the end of each month for the next 5 years. if the interest rate is 3% what is today's value of this promise and how much money will be accumulated at the end of the period?

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Today's value of this promise is $6,632. This means if your uncle gave you $6,632 today, it would be the same as him giving you $1,500 every month for the next 5 years.

At the end of the period, the total accumulated amount will be $90,000. This is because with each month that passes, the value of the $1,500 increases due to the 3% interest rate.

The interest rate accumulates each month, meaning that by the end of the 5 years the total accumulated amount will be much higher than the original amount promised.

For example, the total accumulated amount after 4 years would be $76,800, and after 3 years it would be $61,200. This illustrates the power of compounding interest and how it can increase the value of money over time.

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10. industrious young lawyer, imgetting minez, purchased some residential rental property three years ago for $275,000, and he now plans on selling it in august of this year. if the sale goes through as scheduled, how much can imgetting allow for depreciation during his last year of ownership? a. $3,825.25 b. $3,236.75 c. $2,648.25 d. $4,413.75

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To determine how much Imgetting Minez can allow for depreciation during his last year of ownership, we need to follow these steps:

1. Determine the depreciation rate for residential rental property, which is 27.5 years for straight-line depreciation.
2. Calculate the annual depreciation amount by dividing the property's value ($275,000) by the depreciation rate (27.5 years).
3. Determine the monthly depreciation amount by dividing the annual depreciation amount by 12 months.
4. Calculate the depreciation for the last year of ownership based on the number of months until the property is sold in August.

Now, let's do the calculations:

1. Depreciation rate for residential rental property = 27.5 years
2. Annual depreciation amount = $275,000 / 27.5 years = $10,000
3. Monthly depreciation amount = $10,000 / 12 months = $833.33
4. Depreciation for the last year of ownership (August) = $833.33 * 8 months = $6,666.64

Therefore, Imgetting Minez can allow for $6,666.64 in depreciation during his last year of ownership. None of the given options (a. $3,825.25 b. $3,236.75 c. $2,648.25 d. $4,413.75) match the calculated amount.

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You are about to introduce a new soft drink into the U.S. market and you are considering using USA Today to advertise the product. The cost of advertising USA Today is $240,000, with the audience size is 2,000,000. Based on the information provided, what is the cost per thousand impressions of advertising your soft drink using USA Today newspaper?
Multiple Choice
360
480
200
240
120

Answers

The cost per thousand impressions (CPM) of using USA Today newspaper to advertise your soft drink is $120. The selection (d) 120 is the right response.

A differential cost is the cost difference between two possible decisions or a change in production level.

The cost per thousand impressions (CPM) of advertising using USA Today can be calculated as follows:

CPM = (Advertising cost / Audience size) x 1000

Plugging in the given values, we get:

CPM = (240,000 / 2,000,000) x 1000

CPM = 120

Therefore, the cost per thousand impressions (CPM) of advertising your soft drink using USA Today newspaper is $120. The correct answer is option (d) 120.

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the law of supply states that, all other things being equal, a. price and quantity are always negatively correlated. b. the quantity supplied falls when the price rises, and the quantity supplied rises when the price falls. c. the quantity supplied falls when the price falls, and the quantity supplied rises when the price rises. d. the supply falls when the price rises, and the demand rises when the price falls. e. the supply falls when the price falls, and the demand rises when the price rises.

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The law of supply states that, all other things being equal, the quantity supplied falls when the price rises, and the quantity supplied rises when the price falls. The correct answer is B.

The law of supply states that, all other things being equal, the quantity supplied of a good or service will increase when the price of the good or service increases, and the quantity supplied will decrease when the price of the good or service decreases.

This is because suppliers are generally willing to produce and sell more of a good or service when the price is high, as it allows them to earn more revenue and profits, and are less willing to produce and sell when the price is low, as it may not cover their costs of production.

Price and quantity supplied are positively correlated, not negatively correlated as in option a. Options d and e are incorrect because they refer to changes in demand, not supply. Therefore, the correct answer is B.

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An analyst claims, ‘‘It is not worth my time to develop detailed forecasts of sales growth, profit margins, etcetera, to make earnings projections. I can be almost as accurate, at virtually no cost, using the random walk model to forecast earnings.’’ What is the random walk model? Do you agree or disagree with the analyst’s forecast strategy? Why or why not?

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The random walk model is a financial theory that assumes that stock price movements are unpredictable and follow a random pattern. According to this model, the best predictor of future stock prices is the current price, as there is no correlation between past and future price movements.

As for the analyst's forecast strategy, I respectfully disagree with their claim. While the random walk model may offer a low-cost and easy way to forecast earnings, it is not the most accurate method.

Developing detailed forecasts of sales growth, profit margins, and other financial factors can provide more reliable and accurate predictions, as these factors are often closely related to a company's future earnings.

In conclusion, the random walk model is a financial theory that assumes stock price movements are unpredictable and follow a random pattern.

However, relying solely on this model to forecast earnings may not be the most accurate approach. Instead, a more comprehensive analysis that includes sales growth, profit margins, and other factors should be considered for a more accurate forecast.

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Topic: BOND AND STOCK VALUATION
solve by hand, using a financial calculator or excel.b. ABC Retailers just issued 200 16-year bonds with face value of €5,000. The quoted price of those bonds is 96.268, and they pay coupon twice a year. If the yield to maturity on this bond is 5.27%, what is the coupon rate? What is the dollar price of each of those bonds? What is the total value of the bonds outstanding?

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The coupon rate for ABC Retailers' 16-year bonds is 5.674%, the dollar price of each bond is €4,813.40, and the total value of the bonds outstanding is €962,680.

To calculate the coupon rate, we can use the following formula:
Coupon Rate = (Yield to Maturity * Face Value) / Quoted Price

Plugging in the given values:
Coupon Rate = (0.0527 * €5,000) / 96.268 = €273.34 / 96.268 = 2.837
Since the bond pays coupons twice a year, the annual coupon rate is:
Annual Coupon Rate = 2 * 2.837 = 5.674%

Now, let's find the dollar price of each bond. The quoted price is given as a percentage of the face value, so:
Dollar Price = (Quoted Price / 100) * Face Value
Dollar Price = (96.268 / 100) * €5,000 = €4,813.40

Lastly, to find the total value of the bonds outstanding, multiply the dollar price by the number of bonds:

Total Value = Dollar Price * Number of Bonds
Total Value = €4,813.40 * 200 = €962,680
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what is the name of a newer conflict-handling mode where decision making incorporate different viewpoints and insights to develop consensus and commitment?

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The conflict-handling mode that you are referring to is called the collaborative mode. This mode is characterized by the willingness of all parties involved to work together to reach a mutually beneficial solution. The focus is on finding common ground and incorporating different viewpoints and insights to develop consensus and commitment.

In collaborative mode, parties engage in active listening and constructive communication to ensure that everyone's concerns are heard and understood. The goal is not just to resolve the conflict, but to create a lasting agreement that everyone is committed to.

Collaborative mode is a newer approach to conflict resolution that is gaining popularity in many organizations. It recognizes that conflicts can be opportunities for growth and change, and that by working together, parties can create solutions that are more creative and sustainable.

Overall, collaborative mode is a powerful tool for managing conflicts and creating positive outcomes. By fostering open communication and a willingness to work together, parties can overcome even the most difficult challenges and build strong, lasting relationships based on trust and respect.

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