FINC 330 FINC330 Homework 8 Solution

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FINC 330 FINC330 Homework 8 Solution

Question 1
Aqua System Inc. expects to have $5,485,096 in credit sales during the coming year. Currently all checks are sent to the home office. A proposed lockbox system can eliminate 5 days of float, releasing funds which, when invested, will earn 9.67 percent per year. What annual savings can Aqua System expect if the system is implemented? Use a 365-day year.
Round the answer to two decimal places Question 2 Book Depot Inc. sells on terms of 1/20, net 80. What is the implicit cost of trade credit under these terms? Use a 365-day year. Question 3 Pets Store Inc. sells on terms of 1/15, net 90. What is the effective annual cost of trade credit under these terms? Use a 365-day year. Question 1 Post Card Depot, a large retailer of post cards, orders 7,156,013 post cards per year from its manufacturer. Post Card Depot plans on ordering post card 23 times over the next year. Post Card Depot receives the same number of post cards each time it orders. The carrying cost is $0.13 per post card per year. The ordering cost is $388 per order. What are the annual carrying costs of post card inventory? Question 2 Post Card Depot, a large retailer of post cards, orders 6,321,485 post cards per year from its manufacturer. Post Card Depot plans on ordering post card 16 times over the next year. Post Card Depot receives the same number of post cards each time it orders. The carrying cost is $0.24 per post card per year. The ordering cost is $358 per order. What are the annual ordering cost of the post card inventory? Question 3 Post Card Depot, a large retailer of post cards, orders 6,665,811 post cards per year from its manufacturer. Post Card Depot plans on ordering post card 19 times over the next year. Post Card Depot receives the same number of post cards each time it orders. The carrying cost is $0.26 per post card per year. The ordering cost is $497 per order. What are the annual total costs of post card inventory? Question 1 Cheeseburger and Taco Company purchases 16,063 boxes of cheese each year. It costs $22 to place and ship each order and $8.57 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders. Calculate Economic Order Quantity. Round the answer to the whole number. Question 2 Cheeseburger and Taco Company purchases 13,346 boxes of cheese each year. It costs $10 to place and ship each order and $4.01 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders. What is the average inventory held during the year? Question 3 Cheeseburger and Taco Company purchases 11,061 boxes of cheese each year. It costs $28 to place and ship each order and $8.01 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders. How many orders will be placed each year? Round the answer to the whole number Question 4 Cheeseburger and Taco Company purchases 6,892 boxes of cheese each year. It costs $30 to place and ship each order and $3.61 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders. What are the annual carrying costs of post card inventory? Round the answer to two decimals. Question 5 Cheeseburger and Taco Company purchases 12,413 boxes of cheese each year. It costs $21 to place and ship each order and $9.69 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders. What is the annual ordering cost of the post card inventory. Question 6 Cheeseburger and Taco Company purchases 13,596 boxes of cheese each year. It costs $13 to place and ship each order and $5.28 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders. What are the annual total costs of post card inventory. Round the answer to two decimals. Question 7 Appliance for Less is a local appliance store. It costs this store $20.84 per unit annually for storage, insurance, etc., to hold microwave in their inventory. Sales this year are anticipated to be 3330 units. Each order costs $77. The company is using Economic Order Quantity model in placing the orders. It takes approximately 1 day to receive an order after it has been placed. If the store insists on a 5 days safety stock (assume 365-days a year), what should the inventory level be when a new order is placed? (Round the answer to the whole number). Question 8 Appliance for Less is a local appliance store. It costs this store $28.96 per unit annually for storage, insurance, etc., to hold microwave in their inventory. Sales this year are anticipated to be 624 units. Each order costs $72. The company is using Economic Order Quantity model in placing the orders. What is the average inventory held during the year including safety stock if the store insists on a 3 days safety stock (assume 365 days a year)?