Kencan Local In the world of cutting-edge fashion, instinct and marketing knowledge are prerequisites to success. Fanny Elly had both. During 2018, his international formal-ware company, Kencan, rocketed to $300 million in sales after 10 years in business. His fashion line covered middle age woman from head to toe with hats, dresses, head scarfs and etc. In Kucing, there was an Kencan shop every five or six blocks, each featuring a unique color.

Manny has gathered there 2018 financial data to aid his analysis: Additionally, Manny has gathered that Kencan holds inventory 70 days, pays its suppliers in 40 days, and collects its receivables in 10 days. The firm has a current annual outlay of $1,550,000 on operating cycle investments. Kencan currently pays 12 percent for its negotiated financing. Kencan uses 750 units of a product per year on a continuous basis. The product has carrying costs of RM45 per unit per year and order costs of $280 per order. It takes 15 days to receive a shipment after an order is placed and the firm requires a safety stock of 4 days usage in inventory.

Data item 2018 value.

Earnings per share (EPS) $6.25

Price per share of common stock $40.00

Book value of common stock equity $60,000,000

Total common share outstanding $2,500,000

Common stock dividend per share $4.00

Additionally, Manny has gathered that Kencan holds inventory 70 days, pays its suppliers in 40 days, and collects its receivables in 10 days. The firm has a current annual outlay of $1,550,000 on operating cycle investments. Kencan currently pays 12 percent for its negotiated financing. Kencan uses 750 units of a product per year on a continuous basis. The product has carrying costs of $45 per unit per year and order costs of $280 per order. It takes 15 days to receive a shipment after an order is placed and the firm requires a safety stock of 4 days usage in inventory.

Along with that Kencan has been presented with an investment opportunity into Europe which will yield cash flows of $34,000 per year starting from 2019, Years 1 through 4, $35,000 per year in Years 5 through 9, and $45,000 in Year 10. This investment will cost the firm $130,000 today, and the firm's cost of capital is 9.5 percent with the assumption that the cash flows occur evenly during the year.

Required: i) Calculate Kencans economic order quantity (EOQ). (5 marks) j) Calculate Kencans reorder point. (3 marks) k) Calculate the payback period for Kencan Investment into Europe. (5 marks) L) Calculate the Net Present Value (NPV) of Kencan Investment into Europe. (5 marks) M) Calculate the Profitability Index (PI) of Kencans Investment into Europe. (2 marks) N) Calculate the Internal Rate of Return (IRR) of Kencans Investment into Europe. (6 marks)