<span>They try to change their behavior through persuasion, intimidation, and imposing costs (financial or otherwise) upon them. This tactic prevents them from being caught off guard and prepares them for any potential hiccup or setback. This change in behavior has the potential to force opponents to submit or rethink their own strategy.</span>
Answer:
The annual inventory carrying cost of the safety stock = $594
Explanation:
Given that:
The average daily demand (d) = 50 units / day
The lead time (LT) = 20 days
The combined standard deviation of demand lead time = 20 units.
The item cost = $75
The inventory carrying cost = 24% of the item cost
i.e. (24/100) × 75 = $18 of the item cost
Let assume that the management of the company wants to offer a service level of 95%.
Then the z-value that relates to 95% confidence interval level = 1.65
So; the safety stock relating to the 95% service level =
= 1.65 × 20
= 33 units
Now:
The annual inventory carrying cost of the safety stock = Safety stock × Inventory carrying cost.
= 33 × $18
= $594
Answer: $242,567.27
Explanation:
The $5,000 is an annuity as it is being paid every year and is a constant amount.
The value in 19 years is the future value of this annuity:
Future value of annuity = Annuity * ( ( 1 + rate) ^ number of years - 1) / rate
= 5,000 * ( ( 1 + 9.5%)¹⁹ - 1) / 9.5%
= $242,567.27
Answer:
Increase current liabilities by $278.25; increase non-current liabilities by $15,900.
Explanation:
Quarterly interest expense = Amount borrowed * (Annual interest rate / 4) = $15,900 * (7% / 4) = $15,900 * 1.75% = $278.25
Since, interest is paid at the end of the second and fourth quarters and principal payments are due at the end of each year, that means both the interest expense and the principal are still liabilities at the end of the first quarters.
It should be noted that a three-year promissory note of $15,900 is a non-current liability since its tenure is more than one year, while the quarterly interest expense of $278.25 for the first quarter is a current liability since it is dues within a year.
Therefore, the effect of this new promissory note on the current and non-current liability amounts reported on the classified balance sheet prepared at the end of the first quarter will be as follows:
Increase current liabilities by $278.25; increase non-current liabilities by $15,900.