None A company carries an averageannual inventory of $3 million if itestimates the cost of capital is 10%so much costs are 7% and risk callsare 6%. What does it cost per yearto carry this inventory?

Step 1: Introduction to the Annual Inventory"Annual inventory" is a term related to business…

Answered: A company carries an average annual…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 3MC

See similar textbooks

Similar questions

Provide answer
The NOPLAT of company XOXO is around 1200$. The company estimates that the growth rate is 6% and the ROIC is 12%. If the cost of capital is 10%, give an approximation to the value of the company.
H3.
If the net profit of the firm is OMR 280000 and the capital employed is OMR 1400000, then the return on capital employed will be 20%. During inflation with net profit calculated with replacement cost is OMR 150000 and the capital employed is OMR 2000000. Then the return on capital employed will be: a) 14% b) 6.82% c) 7.5% d) 9%
Kyle Company had the following information pertaining to 2022:Profit P100,000Sales P1,000,000Asset Turnover ratio 2 timesThe desired minimum rate of return is 15 percent. Questions: 1. What is the Return on Sales? 2. What is the ROI? 3. What is the amount of assets?
Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%?a. What are the projected sales in Years 1 and 2?b. What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? c. What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2?d. What is the projected FCF for Year 2?
An A firm has sales of $10 million, variable costs of $4 million, fixed expenses of $1.5 million, interest costs of $2 million, and a 30 percent average tax rate. a) Compute its DOL, DFL, and DCL. b) What will be the expected level of EBIT and net income if next year's sales rise 10 percent? c) What will be the expected level of EBIT and net income if next year's sales fall 20 percent?
Consider a firm with an annual net income of $20 million, revenue of $60 million and cost of goods sold of $20 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, what is the inventory turnover? 12.50 10.00 40.00 8.00
You have the following data for a company. What is the return on assets (ROA)? Return on equity = 15%; Earnings before taxes = $150,000; Total asset turnover = 1.8; Profit margin = 10.5%; Tax rate = 30%.
Your company is evaluating a new factory that will cost $14 million to build. Your target debt-equity ratio is 1. The flotation cost for new equity is 7% and the flotation cost for new debt is 4%. The company is planning to use retained earnings for 50% of the equity financing. What are the weighted average flotation costs as a fraction of the amount invested? What are the flotation costs (in $ million )?
the operating profitability ratio of company a is 2%. the return on invested capital is 10%. what is the capital requirement ratio for company A
An A firm has sales of $10 million, variable costs of $4 million, fixed expenses of $1.5 million, interest costs of $2 million, and a 30 percent average tax rate. Compute its DOL, DFL, and DCL. What will be the expected level of EBIT and net income if next year's sales rise 10 percent? What will be the expected level of EBIT and net income if next year's sales fall 20 percent?

SEE MORE QUESTIONS

Recommended textbooks for you

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SEE MORE TEXTBOOKS

A company carries an average annual inventory of $3 million if it estimates the cost of capital is 10% so much costs are 7% and risk calls are 6%. What does it cost per year to carry this inventory?