Al-Shamukh Constructors Ltd.currently has sales of OMR 24 million a yearwith a stock level of 25 percent of the sales Annual holding cost for the stock is 20 percent of value. Operating cost (excluding the cost of tocks) are OMR 15 million a year and other assets are valued at OMR 30 million. If the stocks levels are reduced to 20 percent of the sales then what will be the improvement (or reduction ) in the rate of return on asset in percentage?

Al-Shamukh Constructors Ltd.currently has sales of OMR 24 million a yearwith a stock level of 25 percent of the sales Annual holding cost for the stock is 20 percent of value. Operating cost (excluding the cost of tocks) are OMR 15 million a year and other assets are valued at OMR 30 million. If the stocks levels are reduced to 20 percent of the sales then what will be the improvement (or reduction ) in the rate of return on asset in percentage?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 11P

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