Answer:
EOQ = 414 rolls
Explanation:
In order to calculate the number of orders to minimize the cost, we should calculate that by using the Economic order quantity model.
DATA
Holding cost = $1.75/unit
Annual demand = 500 rolls x 12 = 6000 rolls
Ordering cost = $25
Formula
EOQ =
Where
Co = ordering cost
D = Annual demand
Ch = Holding cost
Solution
EOQ = 
EOQ = 
EOQ = 414 rolls
They should order 414 rolls to minimize the cost.
Answer:
The answer is:
For italy: $35 billion
For Greece: -$40 billion
Explanation:
Injection into the economy = $70 billion.
Government spending multiplier is 1.5.
MPC = $70billion x 1.5
=$105 billion.
Change in Italy's real GDP due to the transfer = $105 billion - $70 billion
= $35 billion.
Greek Government.
Multiplier effect = 1 ÷ (1-MPC)
1 ÷ (1-0.6)
1÷ 0.4
-2.5.
It is negative because it is a reduction in government spending.
Therefore, the final change in real GDP as a result of this decreased spending is
-2.5 x $16 billion
= -$40 billion
Answer:
$400
Explanation:
From the question, there is a butterfly spread when a trader buys 100 options with strike prices $60 and $70 and sells 200 options with strike price $65.
The maximum gain is the point where both the stock price and the middle strike price are equal, i.e. equal to $65. At that point, the options payoffs are respectively $500, 0, and 0. By implication, the total payoff is $500.
The set up cost of the butterfly spread can be calculated as follows:
Setup cost = ($11×100) + ($18×100) – ($14×200)
= 1,100 + 1,800 – 2,800
Setup cost = $100
Net gain = Options payoffs – Setup cost = $500 - $100 = $400
Therefore, the maximum net gain (after the cost of the options is taken into account) is $400.
Answer: $16,925.90 increase
Explanation:
Company already has the excess capacity to handle this order so the fixed costs will not be included as they would have already been incurred.
Cost of manufacturing the trees would be:
= Variable cost + Fixed cost
= ((51.61 + 3.80 + 1.00 + 8.26 for white tree) * 230 trees) + 5,000 for molds
= (64.67 * 230) + 5,000
= $19,874.10
Incremental revenue = 230 trees * 160
= $36,800
Incremental operating income = 36,800 - 19,874.1
= $16,925.90 increase
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<em>Note: Options might be for a variant of this question. </em>
Answer:
$3,402
Explanation:
We are to calculate the future value of the annuity
The formula for calculating future value = A x (B / r)
B = [(1 + r)^n] - 1
R = interest rate
N = number of years
(1.10)² - 1 = 0.21
$1,620 x( 0.21 / 0.1) = $3,402
