Working Capital Management
Not what you're looking for?
Part a) Jackson Electronics inventories computer chips that cost $30.00 each. Inventory carrying cost is approximately 20% of value. It costs $40 to place, process, and receive an order. The firm uses 3,000 chips a year. What ordering quantity minimizes the sum of ordering and carrying cost?
Part b) Mathey, Inc. uses 4,000 cinder blocks a year. On average, the cinder blocks cost $14,and the annual cost of carrying one in inventory is $1.44. The cost of placing an order is$45. Use the economic order quantity model to determine annual, total inventory cost.
Part c) APPL, Inc. uses 10,000 litres of resin a year. On average, a litre of resin costs $43, and the annual cost of carrying one in inventory is $2.40. The cost of placing an order is $120. Use the economic order quantity model to determine annual, total inventory cost.
Part d) What is the approximate effective interest rate implied by not taking the discount when credit terms are 1/10, net 20?
Part e) Franklin Inc has a $20M revolving credit agreement with its bank at prime plus 3%. Prior to April, it had taken down $10M. On April 15, it took down another $5M. Prime is 9%, and the bankâ??s commitment fee is 0.25% annually. Calculate Franklin's April interest charges.
Purchase this Solution
Solution Summary
The working capital management for Jackson Electronics Inventory are examined.
Education
- MBA, Indian Institute of Finance
- Bsc, Madras University
Recent Feedback
- "I've posted a similar question for another course. It's post 657940, and it's a practice problem that I'd like to use for the final exam. Your help will be greatly appreciated. "
- "thank you!"
- "Thank you again Jayant. You are super fast. "
- "Thank you Jayant. You are appreciated. "
- "Again, thank you Jayant. You are wonderful. "
Purchase this Solution
Free BrainMass Quizzes
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Basics of corporate finance
These questions will test you on your knowledge of finance.