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Forums › ACCA Forums › ACCA FM Financial Management Forums › Help.
Hi.
Can someone please help me with these questions.
Q1.
PQR Co has a demand of 7500 units per month.
Each unit costs $5, ordering costs are $100 per order, and inventory holding costs are 10% of purchase price per year.
There is a lead time of 4 weeks between placing an order and receiving delivery.
What is the Economic order quantity?
Q2.
PQR Co has a demand of 7500 units per month.
Each unit costs $5, ordering costs are $100 per order, and inventory holding costs are 10% of purchase price per year.
There is a lead time of 30 days between placing an order and receiving delivery. If they order the EOQ each time, how frequently will they place an order?
Q3.
A company has agreed to lease a machine for a period of 8 years, with equal annual payments payable at the start of each year.
The NPV of the agreement at a rate of 10% is $52000.
What is the annual lease payment?
Q4.
The share price of CP Plc is $4 per share.
They announce a 1 for 5 right issue at $3.10 per share.
What % of right offered to a shareholder does the shareholder need to take up so as to have no net cashflow resulting from the issue?
Q5.
R Plc has in issue $400000 8% bonds, redeemable in 5 years time at a premium of 10%.
Investors require a return on 12%.
The rate of tax is 35%.
What is the total market value of debt in issue?
