Economic Order Quantity
Jane wants to determine the optimum amount of money to withdraw from an automatic teller machine (ATM) per transaction. The bank charges $.30 per ATM withdrawal transaction and a flat service charge of $5.00 per month. Jane spends an average of $10.00 per day. She figures there is a 10% chance that she will lose her wallet or be robbed in any given year. The bank pays 6% per year on checking account balances. (a) What is her optimal withdrawal amount per transaction? (b) How might the amount of Jane's withdrawals be altered if she moved to a high crime area?
Homework Answers
Q.2
(a) Economic Order Quantity= √2DS/H
where: D=Demand in units(on annual basis), S = Order Cost(per purchase order). H = Holding Cost(per unit per year)
=√(2*38000*9)/1= √684000/1=827 units
2. The Hercules Machine Company purchases 38,000 units of a component each year at a price...
2. The Hercules Machine Company purchases 38,000 units of a component each year at a price of $4.00 per unit. The ordering cost is $9.00 per order, and the annual holding cost is estimated at 25% of the unit value. (a) What is the economic order quantity for the component? (b) What is the total annual inventory cost for the component if it is ordered in economic quantities? (c) What is the maximum number of components in inventory at one...
Jane currently has $5,700 in her savings account and $2,000 in her checking account at the local bank. Instructions: Use a positive number to represent an increase and a negative number to represent a decrease. a. Suppose she withdraws $350 in cas
Jane currently has $5,700 in her savings account and $2,000 in her checking account at the local bank. Instructions: Use a positive number to represent an increase and a negative number to represent a decrease. a. Suppose she withdraws $350 in cash from her savings account. By what dollar amount does the country's money supply (M1 and M2) change as a result of Jane's actions?b. Now suppose instead that Jane withdraws $350 from her checking account and uses $190 of this money to pay her federal...
Jane currently has $5,100 in her savings account and $2,000 in her checking account at the...
Jane currently has $5,100 in her savings account and $2,000 in her checking account at the local bank. Instructions: Use a positive number to represent an increase and a negative number to represent a decrease. a. Suppose she withdraws $350 in cash from her savings account. By what dollar amount does the country's money supply (M1 and M2) change as a result of Jane's actions? Change in M1: $____ Change in M2: $____ b. Now suppose instead that Jane withdraws...
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Your roommate, Akira, is embarrassed. She has never before had a checking account, but she finally...
Your roommate, Akira, is embarrassed. She has never before had a checking account, but she finally opened one last month. She's standing in the doorway of the kitchen with her check register in one hand and her recently arrived bank statement in the other. Admitting that she doesn't know what to do next, she's asked for your help in learning how to reconcile, or balance, her checkbook. Being both a good friend and a student of personal finance, you've agreed...
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appropriate letter to the right of each one.
Amy is single and 25 years old. She graduated two years ago and has been working full time ever since. She is having a bit of trouble getting her finances in order. She just can't seem to make ends meet and can't seem to save any money. Her employment income is $31,000 per year. She is...
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Show a Score: 0 of 1 pt 5 of 5 (1 complete) HW Score: 20%, 1 of 5 pts E5-30 (book/static) Question Help Walliston direct prote ional costs wws: United Savings Bank (USB) is examining the profitability of its Premier Account, a combined savings and checking account. (Click the icon to view account information.) USB recently conducted an activity based costing study of its services. It assessed the following costs for six individual services. The use of these services in...
6. Checking account reconciliation Aa Aa E How Do You Balance Your Checkbook? Your roommate, Akira, is embarrassed. She has never before had a checking account, but she finally opened one last month. She's standing in the doorway of the kitchen with her check register in one hand and her recently arrived bank statement in the other. Admitting that she doesn't know what to do next, she's asked for your help in learning how to reconcile, or balance, her checkbook....
Your roommate, Akira, is embarrassed. She has never before had a checking account, but she finally opened one last month. She's standing in the doorway of the kitchen with her check register in one hand and her recently arrived bank statement in the other. Admitting that she doesn't know what to do next, she's asked for your help in learning how to reconcile, or balance, her checkbook. Being both a good friend and a student of personal finance, you've agreed...
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