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PLEASE SOLVE AND SHOW ALL WORK . . Total current assets: $2,200,000 Total current liabilities: $1,200,000 Cash: $300,000 Inventory: $1,000,000 Accounts Receivable: $800,000 Accounts Payable:
PLEASE SOLVE AND SHOW ALL WORK
. . Total current assets: $2,200,000 Total current liabilities: $1,200,000 Cash: $300,000 Inventory: $1,000,000 Accounts Receivable: $800,000 Accounts Payable: $500,000 Net sales is $10,000,000 Variable cost (VCR) is 30% of sales Cost of Goods Sold (COGS) at 40% of sales Average daily cash flow $27,000 Standard deviation of cash flow is $40,000 Its ROE is 25% Total earnings of $500,000, dividend payout of $150,000. Its cost of capital is 7% Line of credit available: $500,000 Its credit terms from supplier is Net 35 (DPO) Its credit terms to customer is Net 45 (DSO) Expenses for credit administration and collection is 5% of sales EXP(-05/CP) Daily interest rate (i) is 7%/365 Collection period for sale is 45 days (CP) t makes the following forecast for 2019: Revenues increase by 10% from 2018 level; Receivables will be 8% of revenues; Inventory will equal to 10% of revenues; Payables are expected at 5% of revenues. 7> ABC firm has the following estimates for its inventory need in 2019: 5,000 tons of copper (D) are required for production each month Ordering Costs are $100/order (OC) Holding Costs are $1.5/ton (HC) a) Calculate the EOQ based on the information; b) What's the total cost at this EOQ unitsStep by Step Solution
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