If production is kept the same, the company is predicted to sell every unit produced which would avoid a stockpile of inventory and also safeguarding an extra 5,000,000 units in ending inventory in case sales go above 30,000,000. In the end, B.E. Company’s net income would increase by a substantial amount due to an increase in sales rather than an increase in ending
Is the use of a monthly average price a net advantage or disadvantage to J & L? Using NYMEX contracts will minimize the asset mismatch aspect of basic risk, along with a better liquidity. However, since diesel fuel is not a traded commodity, it cannot be directly hedged and J&L will suffer a certain amount of basis risk. J&L will also need to post a margin for their future contracts at NYMEX. Using product offered by Continental Bank would require a higher cost for J&L, and illiquid compared with NYMEX.
To save any money it would be better to manufacture than buy. 2. The accountant decided to investigate the fixed costs to determine whether any incremental changes would occur if the subassembly were no longer manufactured. The accountant believes that Yoklic will eliminate $50,000 of fixed overhead if it accepts the proposal. Does this new information change the decision?
The reorder quantity is the amount that furnishing companies buy from the suppliers, when getting an order. (a measurement, from 0 to 500) Maximum stock level – illustrates if the company has too many resources delivered from suppliers, which can incur as heavy additional costs, and it’s a GREEN line at the top. Lead Time – is what’s between an order placement and stock arrival. Stock is different in reality though; normally there would be different rates than in diagram, so it can be only used as example of how Furnishing business or Hunters of Derby may manage their business… Normally company is not so perfect, and could have problems with stock reorder, where furnishing elements are not being made on time, or there is problem with time leading, or transport, so in reality it is difficult to describe it in one diagram. Business may also consider the price of stock, and the amount of resources in compartment with both, which has to be calculated in order to be more precise.
With availability to easy credit such as this, people were encouraged to continue buying goods. However, this would only work if the prices continued rising, but when prices started falling problems set in. 75% of the purchase price of shares was borrowed. Loss in Confidence – Due to the unsteady rates of the share prices, people lost confidence in the Stock Market as they did not want to risk losing everything. In 1929, experts started to sell their shares heavily before the values fell even further.
e. The company should buy the steel at this price. The shadow price for stainless steel is $0.8 per ounce and the maximum allowable increase is 555.6 ounces. Because 500 is in this range, the $0.8 is valid. Thus, the value of 500 additional ounces is = 500 ($0.8) = $400. However, the local distributor has offered to sell Parket Sisters an additional 500 ounces of stainless steel for $0.60 per ounce more than it ordinarily pays, so the value of 500 additional ounces is =500(0.8)- 500 ($0.6) = $100>0. f. An increase of 500 in the RHS value of the third constraint is within the allowable range of increase for the shadow price of this constraint.
What advantage does buying stock on margin offer Victor? Under the following conditions the percentage earned by Victor is: 50.5% One advantage Victor has buying the stock on margin is that he will be able to use the borrowed funds to increase his percentage of return. 3. What would be the percentage returns if the sale prices had been $50 or $100? If the sale price was $50: The percentage of returns for Darin would be at a loss of -16.3% The percentage of returns for Victor would be at a loss of -31.8% If the sale price was $100: The percentage of returns for Darin would be at a gain of 66.1% The percentage or returns for Victor would be at a gain of 105.4% 4.
Despite scouting for smaller opportunities, a first round of $250 million funding may not be sufficient for Brazos to invest in any more than a few firms which gives them limited scope for diversification. This places greater pressure on a first time fund and in particular, Brazos’ motivation to add value by simply promoting organic growth in cash flow and operational efficiency in the hope of enhancing industry scale. Additionally, the existence of dependable cash flow and management make it easier to acquire debt financing and increase leverage which suits a first time fund. Furthermore, Brazos’ previous relationships and experience in the market allowed it to mitigate aspects of first fund bias which inhibit the entry of many prospective VC firms into the industry. Brazos’ GTT method is one of its points of differentiation which appear limited in its application to a variety of firms outside the ‘family-owned business’ model.
TRX’s road show produces some bad news for the IPO. It appears that there is not enough interest in the preliminary file range of $11 to $13 per share. Based on the demand it would appear as though the price needs to be lowered to at least $9 per share. If the price is not lowered to $9 they will most likely not meat this offering. However, the strategic investors bought the shares at $11 per share.
It may be an option to consider losing market share but staying with higher prices. We will start making revenue of $342 when we capture a minimal market share of 15.6% (approximately 50,500 customers) if we charge a bundle price of $84.95. The Table 3 below shows the variation