Green Lantern, a pub & grill estimates that it will sell 10 000 beers per year which it will purchase from a distributor in Luanshya. A beer costs K18.00 to purchase and K2.00 in freight charges each. The company borrows funds at 9 % interest rate to finance inventories. Green Lantern’s purchasing agent has calculated that it costs K50.00 to place an order for beers and that the handling is K3.00 for each beer. 1. Calculate the number of beers that Green Lantern should request in each order 2. Calculate the annual number of orders 3. Calculate the total annual ordering cost

A farmer wants to sell future harvest of wheat at the current rate of Rs.18, but he fears that the wheat prices might fall in the next 3 months. In this case, he enters a contract with a grocery store for selling them 1000kgs of wheat at Rs.18 in 3 months. Draw the pay-off chart for the farmer.

A Carrefour supermarket in Ajman uses a supplier in Fujairah for a particular brand of bottled water. The annual demand for this product is 42,000 units (bottles of water). This Carrefour purchases bottled water from its supplier at a price of 0.8 Dirhams per bottle. The inventory holding cost per bottle of water per year is 0.4 Dirhams. The ordering cost for this Carrefour is 80 Dirhams per order, and the lead-time is 2 days. The company operates 260 days a year. This Carrefour uses the basic EOQ model to manage its inventories. Note: Show all the steps and details of your calculations to get full mark. Note: For questions 2.A, 2.B, and 2.C only, please use 2 decimal points in your answers This is not the case for question 2.D, as discussed in class (for ROP). Q.2.C. What is the average inventory?

They collect rent revenue of $20 sf/yr for WalMart ( 100,000 sf) since it is an anchor store. They charge BestBuy $25sf/yr( 70,000 sf) plus 10% of sales that exceeds $200 sf/yr. Sales in the first year of BestBuy is expected to be $160 sq/ft and growing at 6% per year. The boutique store( 30,000 sf) is charged $23 sf/yr plus 10% for sales that exceeds $100 sf/yr. Sales for the boutique store in year 1 is $105 sf/yr and is expected to grow at 4% per year.   Calculate the gross potential rental revenue for these three tenants. Thank you.

Jeff & Bezos is a fresh groceries delivery company. The company has access to borrowing funds at a pre-tax rate of 8% per year. Jeff & Bezos pays income taxes using 22% tax rate. The company would like to start using high speed low-altitude drones to deliver grocery purchases directly to residential customers backyards. Doing so would bring the company pre-tax savings in the amount of $3.2 million each year. The required fleet of drones costs $8.3 million. If the company chooses to buy them, the drones would be losing their economic value following the straight-line depreciation method during a five year period. The fieet of drones, due to their heavy usage, would have no salvage value at the end. Instead of buying the fleet of the drones, Jeff & Bezos is also contemplating leasing the drones for a lease term that matches the drones" economic life. It would lease them from a different company, Nets & Flicks, that currently owns the required number of the drones. The…

Golden Gate Novelties (GGN) sells souvenir key chains at the local airport. GGN charges $12.00 per chain. The variable cost for a chain, including the wholesale cost of the chain, packaging, the commission paid to the airport operator, and so on, is $10.40. The annual fixed cost for GGN is $15,000. Required: a. How many cases must Golden Gate Novelties sell every year to break even? Note: Do not round intermediate calculations. b. The owner of GGN believes that the company can sell 12,500 chains a year. What is the margin of safety in terms of the number of chains? a. Break-even point b. Margin of safety chains chains

Global Athletes Pty Ltd is a large sports goods retailer. It purchases ‘sweet spot’ badminton set rackets for $110 each from Sport Australia Pty Ltd, a large manufacturer of sports products. Sport Australia has an annual turnover of more than 30 Million and has an accruals basis accounting system. Global Athletes Pty Ltd plans to sell the badminton set rackets at a 200% mark-up to its customers. In January last year, it purchased 100 racquets. However, in April, it discovered that 10 of these racquets had design faults, and it returned them to the manufacturer and obtained a full refund. Explain the GST consequences of this arrangement for both parties.