Question
Jackie is a lady entrepreneur from Chicago, Illinois. She owns and runs a pebbles manufacturing company called JK Pebbles Inc.. She has customers both within
Jackie is a lady entrepreneur from Chicago, Illinois. She owns and runs a pebbles manufacturing company called JK Pebbles Inc.. She has customers both within and outside of the United States of America. She buys naturally available rocks (in different colours) like granite, marble and quartz from the local quarries. The raw material is put through processes of crushing, tumbling and polishing before being packed and dispatched to the customer. Jackies factory is in operation for 250 days a year. Her products are mainly used by her customers for landscape and garden designing. Data given: (1) Number of orders placed during the year for the raw material white quartz = 5. (2) Quantity per order = 50 tonnes = EOQ (Optimal order quantity). (2) Total ordering cost for the year 2016 = $1,000. (3) Carrying cost per unit per year = $40 (4) Number of working days in a year = 250 (5) An order for white quartz was placed with the supplier on June 1, 2015 and the same was received on June 6, 2015. Jackie wants to accumulate a fund of $100,000 in six years (from December 31 of the current year) to retire a long-term note. Three years ago, the board of directors had passed a resolution instructing the treasurer to make ten equal annual deposits in a fund earning 9% compounded annually. Because no one knew how to compute the equal deposits, the treasure decided to deposit $ 9,000 at the end of each year. The fourth deposit was made on December 31 of the current year. FV of ordinary annuity for 4 years and 6 years at 9% = 4.5731 and 7.5233 respectively , FV of $1 after 6 years at 9% = 1.67710 Jackie has the following capital structure on December 31 Equity shares (200,000 Shares) - $6,000,000 5% Preference shares- 1,000,000 8% Debentures- 2,000,000 Total - 9,000,000 The companys shares are currently selling for $25. The company is expected to pay a dividend of $2 per share and is expected to grow at 8% in the coming years. Assume a tax rate of 40%.
Q1).The company follows the Economic Order Quantity (EOQ) model for ordering raw material from its suppliers. What is the Annual demand for the raw material item?
Group of answer choices
50 tonnes
200 tonnes
250 tonnes
300 tonnes
Q2).Ordering cost per order ?
50
200
250
300
Q3.)Total carrying cost ?
1000
2000
1500
2000
Q4).
Total inventory cost
Group of answer choices
4000
2000
3000
2500
Q5).
What is the expected time between orders?
Group of answer choices
250 tonnes
200 tonnes
100 tonnes
50 days
Q6).Based on the assumption that the supplier takes the same amount of lead time as in 2015, calculate the reorder point for white quartz. Exclude the day of placing the order and the day of receipt of the material in calculation of lead time. "
Group of answer choices
4 tonnes
6 tonnes
8 tonnes
10 tonnes
Q7).What equal annual deposits should be made during the next six years, starting a year from now, if exactly $100,000 is to be accumulated in the fund to retire the long-term note?"
Group of answer choices
16667
10667
4117
6237
Q8).
Calculate cost of equity share
Group of answer choices
0.08
0.1
0.12
0.16
Q9).
Calculate cost of debt
Group of answer choices
0.032
0.048
0.08
0.113
Q10).
Calculate weighted average cost of capital
Group of answer choices
0.1229
0.1117
0.13
0.086
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