My 3 free questions for today are: Expected level of sales: Expected Outcome: 135,000 390,000 93,750 ANSWER 618,750 2- Expected Value sharp knife company expects sales next year to be 1,5000,000 if economy is strong if the economy is steady and 500,000 if the econonomy is weak. Mr Sharpe believes there is a 20 percent probablity the economy will be strong, a 50 percent probability of steady economy, and a 30 percent probability of a weak economy. What is the expected level of sales for the next year? 3- External financing Axle Supply Co. expects sales next yeart to be 300,000. Inventory and accounts receivable will increase by 60,000 to accommodate this sales level. The compan has a steady profit margin of 10 percent with a 30 percent dividend payout. Houw much external financing will the firm have to seek? Assume there is no increase in liabilities other thatn that which will occur with the external financing. 5. Level versus leasonal production Antoio Banderos & Scarves makes headwear that is very popular in the full winter season. Units sold are anticipated as: October???.1,000 November?.2,000 December?..4,000 January???3,000 10,000 units If seasonal productions is used, it is assumed that inventory will directly match sales for each month and there will be on inventory buildup. However, Antonio decides to go with level production to avoind being out of merchandise. He will produce the 10,000 items over 4 months at a level of 2,500 per month. a. what is the ending inventory at the end of each month? Compare the unit sales to the units produced and keep a running total. b. If the inventory costs $5 per unit and will be financed at the bank at a cost of 12 percent, what is the monthly financing cost and the total for the four month? Use 1 percent or the monthly rate.
Paper#11894 | Written in 18-Jul-2015Price : $25