Agift shop sells little lentils—cuddly animal dolls stuffed with dried lentils—at a very steady pace of 10 per day, 310 days per year. the wholesale cost of the dolls is $5, and the gift shop uses an annual interest rate of 20 percent to compute holding costs. (a) if the shop wants to place an average of 20 replenishment orders per year, what order quantity should it use? (b) if the shop orders dolls in quantities of 100, what is the implied fixed order cost? (c) if the shop estimates the cost of placing a purchase order to be $10, what is the optimal order quantity?

Which of the following actions would be most likely to reduce potential conflicts of interest between stockholders and bondholders? a) compensating managers with stock options, b) financing risky projects with additional debt, c) the threat of hostile takeovers, d) the use of covenants in bond agreements that limit the firm's use of additional debt and constrain managers actions, e) abolishing the security and exchange commission

Which of the following statements is correct? a. two firms with identical sales and operating costs but with different amounts of debt and tax rates will have different operating incomes by definition. b. free cash flow (fcf) is, essentially, the cash flow that is available for interest and dividends after the company has made the investments in current and fixed assets that are necessary to sustain ongoing operations. c. retained earnings as reported on the balance sheet represent cash and, therefore, are available to distribute to stockholders as dividends or any other required cash payments to creditors and suppliers. d. if a firm is reporting its income in accordance with generally accepted accounting principles, then its net income as reported on the income statement should be equal to its free cash flow. e. after-tax operating income is calculated as ebit(1 - t) + depreciation.

Lead time for one of your fastest-moving products is 20 days. demand during this period averages 90 units per day. a) what would be an appropriate reorder point? ) how does your answer change if demand during lead time doubles? ) how does your answer change if demand during lead time drops in half?