ATIQ, a small global jewellery and crafts marketing company, is beginning to expand into other markets in North America outside of “la Belle Province”. Its financial statements are as follows: ATIQ plans to make monthly outgoings of $2,000 in year N+1, in order to meet its financial commitments. These outgoings are made at a relatively regular rate during the year. It generally invests its liquidity (cash) in treasury bills at an average rate of return of 20%. A transaction to buy or sell treasury bills costs the firm $50. ATIQ has the privilege of being among the first customers served by the supplier. Sales of jewellery and accessories average 120 units annually. The cost of an order is $10 and the cost of holding one unit of jewellery or accessory is $2. What is the optimal quantity to order?
ATIQ, a small global jewellery and crafts marketing company, is beginning to expand into other markets in North America outside of “la Belle Province”. Its financial statements are as follows: ATIQ plans to make monthly outgoings of $2,000 in year N+1, in order to meet its financial commitments. These outgoings are made at a relatively regular rate during the year. It generally invests its liquidity (cash) in treasury bills at an average rate of return of 20%. A transaction to buy or sell treasury bills costs the firm $50. ATIQ has the privilege of being among the first customers served by the supplier. Sales of jewellery and accessories average 120 units annually. The cost of an order is $10 and the cost of holding one unit of jewellery or accessory is $2. What is the optimal quantity to order?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
ATIQ, a small global jewellery and crafts marketing company, is beginning to expand into other markets in North America outside of “la Belle Province”.
Its financial statements are as follows:
- ATIQ plans to make monthly outgoings of $2,000 in year N+1, in order to meet its financial commitments. These outgoings are made at a relatively regular rate during the year. It generally invests its liquidity (cash) in treasury bills at an average
rate of return of 20%. A transaction to buy or sell treasury bills costs the firm $50. - ATIQ has the privilege of being among the first customers served by the supplier. Sales of jewellery and accessories average 120 units annually. The cost of an order is $10 and the cost of holding one unit of jewellery or accessory is $2. What is the optimal quantity to order?
![Its financial statements are as follows:
国
ATIQ's year-end review
Passif et avoirs des
emen
Assets
N+1
actionnaires
N+1
Current liabilities/short
term liabilities
Current assets/short
er du
term assets
Fournisseurs
7 850 63 670
Clients
12 950 20 640
rme s
es cli
el est
Stock of raw
materials and
er du
finished products
10 000 16 650
Total of Current
caisse
assets/short term
déca
assets
énér
Une t
Total ofCurrent liabilities/short term
liabilities
Liabilities and assets
22 950
37 290
63 670
Fix assets
of shareholders
Net fixed assets
900
90 000
Long-term liabilities
al de
Long-term debt
10 000 13 620
er du
Shareholder's equity
Ordinary share capital/
Common share capital
'être
soire
$et
50 000 50 000
Retained profits/
Profits not distributed
50 000
Total shareholders'
equity
ale à
100 000 50 000
rer du
Total liabilities and
shareholders' equity
Total current assets
117 850
127 290
117 850
127 290](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F01132aea-1467-40ea-8df9-dfca3f8e8165%2Ff3abf46a-dbf3-4f07-9c3b-37fc93d3a6dd%2Ffc6gvdc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Its financial statements are as follows:
国
ATIQ's year-end review
Passif et avoirs des
emen
Assets
N+1
actionnaires
N+1
Current liabilities/short
term liabilities
Current assets/short
er du
term assets
Fournisseurs
7 850 63 670
Clients
12 950 20 640
rme s
es cli
el est
Stock of raw
materials and
er du
finished products
10 000 16 650
Total of Current
caisse
assets/short term
déca
assets
énér
Une t
Total ofCurrent liabilities/short term
liabilities
Liabilities and assets
22 950
37 290
63 670
Fix assets
of shareholders
Net fixed assets
900
90 000
Long-term liabilities
al de
Long-term debt
10 000 13 620
er du
Shareholder's equity
Ordinary share capital/
Common share capital
'être
soire
$et
50 000 50 000
Retained profits/
Profits not distributed
50 000
Total shareholders'
equity
ale à
100 000 50 000
rer du
Total liabilities and
shareholders' equity
Total current assets
117 850
127 290
117 850
127 290
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