QUESTION 14 more efficiently, the management of Big Toy, Inc. has decided to use

Question

QUESTION 14

more efficiently, the management of Big Toy, Inc. has decided to use the EOQ model plus a safety stock to determine inventory levels. What is the economic order quantity? Today is January 1 and the current level of inventory is 10,000 units; when should the first order be placed based on the economic order quantity? Management always wants sufficient Big Blobs so that they never are out of stock. If management considers late deliveries to be the prime reason for being out of stock, what should be the safety stock? According to the above analysis, what are the maximum inventory, the minimum inventory, and the average inventory? If sales of Big, Blobs double, will the average inventory also double? Firm X has sales of $5,000,000, $3,000,000 are for cash, but two customers who generate sales of $2,000,000 pay after 30 days. Management believes that sales will increase by 20 percent if all customers have 30 days to pay. Should the firm change its credit policy given the following information? The cost of the additional goods sold is 70 percent of sales. Credit checks and collection costs will be $5,000. Three percent of the new sales will be uncollectible. The cost of borrowing the funds to carry the receivables is 12 percent. If you purchase a $10,000 short-term (90-day) negotiable certificate of deposit for $9,814, what is the discount yield, the simple yield, and the true compound yield? What is the compound yield on a Treasury bill that costs $98,760 and will be redeemed for $100,000 after 90 days? How much additional return would you have to corn if you had bought $100,000 worth of 90-day commercial paper for $98478? What is the effective, compound rate of interest you earn if you enter into a repurchase agreement in which you a Treasury bill for $76,789 and agree to sell it after a month (30 days) for $77,345? What is the compound rate of interest you pay if you sell Treasury bill for $76,789 and repurchase it after 30 days for $77,345?

Explanation / Answer

Effective Annual Rate = [1+ ($77,345 - $76,789) / $76,789]^360/30

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.