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Forums › ACCA Forums › ACCA FM Financial Management Forums › Help.

  • This topic has 0 replies, 1 voice, and was last updated 10 years ago by marium salman.
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  • December 4, 2014 at 11:26 pm #217747
    marium salman
    Member
    • Topics: 38
    • Replies: 58
    • ☆☆

    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?

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