CAICOSMUNITJuicy-Juice Ltd. is planning to increase its juice supply for the fiscal year 2021 - 2022. With the expectedincrease in demand, it is projected that there is a need for additional space. Management must decidewhether to rent a large building or construct a medium factory space.If they rent a large building and the demand is low, the net present value after deducting for building costswill be $230,000. If the demand is high, the company can continue using the old factory or rent anadditional building to meet the current need. Renting an additional building would have a net present valueof $301,000 and using the old factory would have a net present value of $530,000. The probability of highdemand is 0.45 while the probability of low demand is 0.55.If a medium factory was constructed and the demand is high, the estimated net present value is $320, 000.If the demand is moderate, the net present value is $195, 000. If the demand turns out to be low, the netpresent value will be (300,000). The probability that the demand will be high, moderate, or low isestimated to be 0.50, 0.25 and 0.25, respectively.(i) Draw the decision tree to represent the above information.(ii) Calculate the expected values of each course of action.(6 marks)(4 marks)(iii) Using the result from (ii) decide which course of action the Juicy-Juice management team should take.(2 marks)Question 2MMINGJuicy-Juice Ltd. wants to predict their sales for the fiscal vear 2021, and the financial team was provided withthe following table with actual sales value in thousands of dollars for the first half of the year:Actual Sales(S, 000)MonthJanuary128112FebruaryMarch186218AprilMay142June135(i) Compute a three - month simple moving average forecast for the monthly sales from April to July 2021.(4 marks)(2 marks)Writing all answers to the nearest whole number:(ii) If the actual sales value for July is $159,000, what is the percentage error in the forecast?(iii) Compute a three- month weighted moving average forecast for the monthly sales from April to July 2021,using the weights: w = 0.55, w, = 0.30 , w, = 0.15(iv) Compute the exponential smoothing forecast from February to August using a = 0.4 and an initialforecast for January $130,000.(x) Calculate the Mean Absolute Deviation (MAD) for each forecasting method.(4 marks)(6 marks)(4 marks)5.ot is sho uestion 2Solve the following LPP problem using the simplex method:ime inMazimize z = 2x, +3x, +4x,3x, +2x, -3x, s4Subject to 2x, +3x, +2x, 56[3x,-x, +2x, 2-8x, 2 0, x, 2 0, x, 20(15 marks)

As per Bartleby guidelines we're supported to answer only one question when two or more different…

Answered: uestion 2 Solve the following LPP…

Intermediate Algebra

19th Edition

ISBN:9780998625720

Author:Lynn Marecek

Publisher:Lynn Marecek

Chapter12: Sequences, Series And Binomial Theorem

Section12.3: Geometric Sequences And Series

Problem 12.58TI: What is the total effect on the economy of a government tax rebate of $500 to each household in...

See similar textbooks

Similar questions

What is the total effect on the economy of a government tax rebate of $500 to each household in order to stimulate the economy if each household will spend of the rebate in goods and services?
A company is offered a contract promising annual net returns of $40,000. The contract’s initialrequired investment is $140,000. After 6 years, no further benefits are available from the contract and its residualvalue is $30,000. Should the company accept the contract if the required rate of return is 16%?
Zimlick, Inc, a US pasta-machine manufacturer, is considering a $2.1 million device from United Technologies Corporation to automate pasta-machine quality inspection. The device will be depreciated according to the straight-line method over three years. The useful life of the device is 5 years, with an estimated sale value at year 5 of $300,000. The project will allow less pasta machines to be scrapped because of low quality, generating pretax earnings of $900,000 per year, and will not change the risk level of the firm. Zimlick’s cost of capital is 18%. The tax rate is 30%. Q1. Show a forecast of the cash flows for the project Q2. What is the net present value of the project? Q3. What is the IRR of the project? Q4. Would you undertake the investment? Why or why not?
The Newcoat Painting Company has for some time been experiencing high demand for its automobile repainting service. Because it has had to turn away business, management is concerned that the limited space available to store cars awaiting painting has cost them in lost revenue. A small vacant lot next to the painting facility has recently been made available for rental on a long-term basis at a cost of $10 per day. Management believes that each lost customer costs $20 in profit. Current demand is estimated to be 21 cars per day with exponential interarrival times (including those turned away), and the facility can service at an exponential rate of 24 cars per day. Cars are processed on a FCFS basis. Waiting space is now limited to 9 cars but can be increased to 20 cars with the lease of the vacant lot. Newcoat wants to determine whether the vacant lot should be leased. Management also wants to know the expected daily lost profit due to turning away customers if the lot is leased. Only…
Pixieedust Telecommunications, Inc has the following target capital structure, which it considers to be optimal: debt = 25%, preferred stock = 15%, and common stock = 60%. PTI's tax rate is 40%, and investors expect earnings and dividends to grow at a constant rate of 6% in the future. PTI paid dividend of $3.70 per share last year (D₁), and its stock currently sells at a price of $60 per share. Ten-year Treasury bonds yield 6%, the market risk premium is 5%, and beta is 1.3. The following terms would apply to new security offerings. Additional information: Preferred - New preferred could be sold to the public at a price of $100 per share, with a dividend of $9. Flotation costs of $5 per share would be incurred. Debt-Debt could be sold at an interest rate of 9%. Common-New common equity will be raised only by retaining earnings. D. WACC ㅁ Δ
Pixieedust Telecommunications, Inc has the following target capital structure, which it considers to be optimal: debt = 25%, preferred stock = 15%, and common stock = 60%. PTI's tax rate is 40%, and investors expect earnings and dividends to grow at a constant rate of 6% in the future. PTI paid dividend of $3.70 per share last year (D₁), and its stock currently sells at a price of $60 per share. Ten-year Treasury bonds yield 6%, the market risk premium is 5%, and beta is 1.3. The following terms would apply to new security offerings. Additional information: Preferred - New preferred could be sold to the public at a price of $100 per share, with a dividend of $9. Flotation costs of $5 per share would be incurred. Debt-Debt could be sold at an interest rate of 9%. Common-New common equity will be raised only by retaining earnings. a. Cost of debt
A private investment club has $3,000 earmarked for investment in stocks. To arrive at an acceptable overall level of risk, the stocks that management is considering have been classified into three categories: high risk, medium risk, and low risk. Management estimates that high-risk stocks will have a rate of return of 17%/year; medium-risk stocks, 7%/year; and low-risk stocks,6%/year. The members have decided that the investment in low-risk stocks should be a quarter of the sum of the investments in the stocks of the other two categories. Assuming that all the money available for investment is invested, how much should the club invest in each type of stock if the investment goal is to have a return of $413/year on the total investment? (Round your answer to 1 decimal place.)
Why is the cost of financing a project with retained earnings lessthan the cost of financing it with a new issue of common stock?
Federated Electronics, Ltd., manufactures display screensand monitors for computers and televisions, which it sellsto companies around the world. It wants to construct a new warehouse and distribution center in Asia to serve emerg-ing markets there. It has identified potential sites in the port cities of Shanghai, Singapore, Pusan, Kaohsiung, and HongKong and has estimated the possible revenues for each(minus construction costs which are higher in some citieslike Hong Kong). At each site the projected revenues are primarily based on these factors, (1) the economic condi-tions at the port including the projected traffic, infrastruc-ture, labor rates and availability; and expansion and modernization; and (2) the future government situationwhich includes the political stability, fees, tariffs, duties,and trade regulations. Following is a payoff table thatshows the projected revenues (in $ billions) for six years given the four possible combinations for positive and nega-tive port and…

Recommended textbooks for you

Intermediate Algebra

Algebra

ISBN:

9780998625720

Author:

Lynn Marecek

Publisher:

OpenStax College

Intermediate Algebra

Algebra

ISBN:

9780998625720

Author:

Lynn Marecek

Publisher:

OpenStax College

SEE MORE TEXTBOOKS

uestion 2 Solve the following LPP problem using the simplex method: ime in Mazimize z 2.x, +3x, +4x, 3x, +2x, -3x, s4 Subject to 2x, +3x, +2x, 56 [3x,-x, +2x, 2-8 x, 2 0, x, 2 0, r, 20