(Answered) 1 a company currently has an inventory item that is vital

Management Studies

1. A company currently has an inventory item that is vital to its production process and costs $2,675. The company uses 1413 units of the item per year and order costs are $102 per order. If the carry costs are $209 per unit what is the EOQ?

2. Fertfood has a current market value of $30 million and earns $2,700,000 annually, while Tools-4U has a market value of $5 million and annual earnings of $1 million per year. If the companies merge an additional cash flow of $35271 would result next year, which is expected to grow at 2.9% per annum. The merged firm's weighted average cost of capital will be 12 percent and will have 11 million shares. If Fertfood pays $5,500,000 in cash for Tools-4U, what would be the net present value of the merger?

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Business Management, Management Studies

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