What does it cost per year to carry this inventory? A company carries an average annualinventory of $4.3 million if itestimates the cost of capital is 13%so much costs are 9% and risk callsare 8%. What does it cost per year tocarry this inventory?

To calculate the annual inventory carrying cost, we sum up the cost components that contribute to…

Answered: A company carries an average annual…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...

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If the annual cost of goods sold is $30,000,000 and the average inventory is$5,000,000,a. What is the inventory turns ratio?b. What would be the reduction in average inventory if, through better materialsmanagement, inventory turns were increased to 10 times per year?c. If the cost of carrying inventory is 25% of the average inventory, what is the annual savings?
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We are predicting for the end of this fiscal year: Skunk Products' EBIT is $1000, its tax rate is 35%, depreciation is $100, capital expenditures are $200, accounts receivable increase by $100, and accounts payable decrease by $100. What is the free cash flow to the firm? The FCFF will grow at 3%, WACC is 10%. What is the value of the company's assets? FCFF1 = $
A firm is considering a new inventory system that will cost $120,000. The system is expected to generate positive cash flows over the next four years in the amounts of $35,000 in year 1, $55,000 in year 2, $65,000 in year 3, and $40,000 in year 4. The firm’s required rate of return is 9%. What is the payback period of this project? 1.95 years 2.46 years 2.99 years 3.10 years Based on the information from Question 47. What is the net present value (NPV) of the project? $28,830.29 $30,929.26 $36,931.43 $39,905.28 Based on the information from Question 47, what is the internal rate of return (IRR) of this project? 14.03% 17.56% 19.26% 21.78% Based on the information from Question 47, what is the profitability index (PI) of this project? 0.87 1.11 1.31 1.83.

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A company carries an average annual inventory of $4.3 million if it estimates the cost of capital is 13% so much costs are 9% and risk calls are 8%. What does it cost per year to carry this inventory?