N16 One more question! Thank you for helping me out. Mobile Radio Corp makes car radios, and recently won a contract to install 35,000 radios in a new line of trucks. Without the contract, Mobile's annual cost of goods sold is $3,500,000. The cost of goods sold for the new contract will be $500,000. a. Without the contract, Mobile keeps an average of $875,000 inventory. How often does Mobile's inventory turn? b. With the contract, how much inventory would Mobile have to keep on hand, to maintain their inventory turns? c. If Mobile can get a 12% annual ROI, what is the opportunity cost Mobile is facing with the contract?

N16 One more question! Thank you for helping me out. Mobile Radio Corp makes car radios, and recently won a contract to install 35,000 radios in a new line of trucks. Without the contract, Mobile's annual cost of goods sold is $3,500,000. The cost of goods sold for the new contract will be $500,000. a. Without the contract, Mobile keeps an average of $875,000 inventory. How often does Mobile's inventory turn? b. With the contract, how much inventory would Mobile have to keep on hand, to maintain their inventory turns? c. If Mobile can get a 12% annual ROI, what is the opportunity cost Mobile is facing with the contract?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter15: Managing Short-term Assets

Section: Chapter Questions

Problem 19PROB

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