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.

Required:

i) Calculate Kencans economic order quantity (EOQ). (5 marks)

ii) Calculate Kencans reorder point. (3 marks)

iii) Calculate the payback period for Kencan Investment into Europe. (5 marks)

iv) Calculate the Profitability Index (PI) of Kencans Investment into Europe. (2 marks)