9.Jared Inc. produces leather handbags. The sales budget for the next four month
ID: 2591174 • Letter: 9
Question
9.Jared Inc. produces leather handbags. The sales budget for the next four months is: July 5,200 units, August 7,800, September 7,900, October 8,800. Each handbag requires 0.5 square meters of leather. Jared Inc.’s finished goods inventory policy is 10% of next month’s sales needs. Jared Inc.’s leather inventory policy is 40% of next month’s production needs. What will leather purchases be in August? (Do not round intermediate calculations. Round your final answer to the nearest whole number.)
Newport Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $220,000. The equipment will have an initial cost of $947,000 and have a 6 year life. There is no salvage value for the equipment. If the hurdle rate is 9%, what is the approximate net present value? Ignore income taxes. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor from the PV tables. Round your final answer to the nearest dollar amount.)
Explanation / Answer
Jared Inc.
Purchases Budget for the month of August
Jared Inc.
Purchases Budget for the month of August
Sales 7,800 Less:Beginning Inventory 7800 X10% 780 Add: Ending Inventory 7900 X10% 790 Inventory to be produced 7,810 Inventory Required for Production 7810 X0.5 3,905 less: Beginning Leather Inventory (Sq.Meters) 7810X0.5 X40% 1,562 Add: Ending Leather Inventory (Sq.Meters) 7990X0.5 X40% 1,598 Purchases of Leather Sq.meters 3,941 Note: September production Needs Sales 7,900 Less:Beginning Inventory 7900 X10% 790 Add: Ending Inventory 8800 X10% 880 Inventory to be produced 7,990Related Questions
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