Mountain Snow Sports, Inc is trying to determine the optimal order quantity for snow boards for the next twelve months. Annual sales are expected to be 1,000,000 units at a retail price of $400 each. The cost of carrying snow boards is $80 per year. Studies show that it costs Mountain Snow $250 to prepare […]
Date: September 19th, 2020
L9 Corp. has a beta of 1.34 and an expected return of 21%. If the market return is 17%, what is the return you would expect to get from a T-Bill? A) 5.24% B) 8.64% C) 3.41% D) 2.16% E) 4.50% ANSWER A
Date: September 19th, 2020
In the capital asset pricing model, an increase in inflationary expectations will be reflected by A) a parallel shift downward in the security market line. B) a decrease in the slope of the security market line. C) an increase in the slope of the security market line. D) a parallel shift upward in the security […]
Date: September 19th, 2020
The CAPM equation includes all of the following EXCEPT: A) Market Risk Premium B) Risk Free Rate C) Standard Deviation D) Beta E) The Return on the Market ANSWER C
Date: September 19th, 2020
Fiesta Taco Company purchases 30,000 boxes of ground beef each year. It costs $50 to place each order and $10.00 per year for each box held as inventory. a. What is the average inventory held during the year? b. What is the economic order quantity for the ground beef? c. How many orders will be […]
Date: September 19th, 2020
XYZ Corp has an expected return of 16%. If the risk free rate is 4.5% and the return for the market is 20%, calculate the Beta for XYZ. A) 1.35 B) 0.86 C) 0.74 D) 1.12 E) 0.95 ANSWER C
Date: September 19th, 2020
Manfred Manufacturing is involved in the production of machine parts. The company uses 600,000 pounds of steel annually. The current purchasing cost for steel is $3.20 per pound. The carrying cost for inventory is 10 percent of the purchase price. The cost of ordering steel is $800 per order. The company has decided to maintain […]
Date: September 19th, 2020
A flower shop is trying to determine the optimal order quantity of the wicker baskets that it places many of its arrangements in. The store thinks it will sell 2000 of these baskets over the next year. The baskets cost the shop $2.00 each. The carrying cost of the baskets is $0.15 each per year. […]
Date: September 19th, 2020
A local lamp store expects to sell 2000 lamps in the coming year. It costs the store $1.00 in carrying costs for each lamp and $10.00 for each order placed. a. What is the economic order quantity for the lamps? b. How many orders will be placed each year? c. If the store wants a […]
Date: September 19th, 2020
The Federal National Mortgage Corporation recommends than your housing expenses not exceed what percentage of your gross monthly income? A) 16 percent B) 28 percent C) 40 percent D) 52 percent ANSWER B
Date: September 19th, 2020
