Juan has a profitable web business of selling T-shirts priced at $25 each. His demand is pretty steady throughout the year (his website is up and running 365 days a year), approximately normally distributed with a mean of 30 T-shirts/day and a standard deviation of 10 T-shirts/day. He has a supplier in China that charges him $5 per T-shirt and a flat rate of $150 every time he places an order. Orders take exactly 50 days to arrive by container ship. His calculates his annual per unit holding costs at 20% of the wholesale cost of T-shirts. a) What type of inventory management problem is this? Explain your answer.

i) Newsvendor (single period) model
ii) EOQ model with continuous demand distribution
iii) EOQ model with discrete demand distribution
iv) MRP model

b) Calculate how many T-shirts he should order from his China supplier at a time.
c) Calculate the level at which he should reorder T-shirts from China to experience at most a 10% chance of a stocking out.
d) Fill in: When inventory drops to ___ T-shirts, Juan should place an order for more T-shirts.

Afirm's before-tax cost of debt, rd, is the interest rate that the firm must pay on debt. because interest is tax deductible, the relevant cost of debt used to calculate a firm's wacc is the cost of debt, rd (1 – t). the cost of debt is used in calculating the wacc because we are interested in maximizing the value of the firm's stock, and the stock price depends on cash flows. it is important to emphasize that the cost of debt is the interest rate on debt, not debt because our primary concern with the cost of capital is its use in capital budgeting decisions. the rate at which the firm has borrowed in the past is because we need to know the cost of capital. for these reasons, the on outstanding debt (which reflects current market conditions) is a better measure of the cost of debt than the . the on the company's -term debt is generally used to calculate the cost of debt because more often than not, the capital is being raised to fund -term projects. quantitative problem: 5 years ago, barton industries issued 25-year noncallable, semiannual bonds with a $1,600 face value and a 8% coupon, semiannual payment ($64 payment every 6 months). the bonds currently sell for $845.87. if the firm's marginal tax rate is 40%, what is the firm's after-tax cost of debt? round your answer to 2 decimal places. do not round intermediate calcu

Storico co. just paid a dividend of $3.15 per share. the company will increase its dividend by 20 percent next year and then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 percent dividend growth, after which the company will keep a constant growth rate forever. if the required return on the company’s stock is 12 percent, what will a share of stock sell for today?

An investor purchases 500 shares of nevada industries common stock for $22.00 per share today. at t = 1 year, this investor receives a $0.42 per share dividend (which is not reinvested) on the 500 shares and purchases an additional 500 shares for $24.75 per share. at t = 2 years, he receives another $0.42 (not reinvested) per share dividend on 1,000 shares and purchases 600 more shares for $31.25 per share. at t = 3 years, he sells 1,000 of the shares for $35.50 per share and the remaining 600 shares at $36.00 per share, but receives no dividends. assuming no commissions or taxes, the money-weighted rate of return received on this investment is closest to: