Cost of capital

different techniques of inventory control. Although the concepts involved in inventory management are production oriented and not strictly financial, it is important that financial manager understands them, since they have certain built-in financial costs. The different tools of inventory control are: 1. A.B.C Analysis 2. EOQ (Economic Order Quantity) 3. VED Analysis 4. GOLF Classification 5. XYZ Analysis 6. SDE Classification…

Conclusions and Recommendations: Pacific Grove Spice Company is currently unable to comply with the bank's requirements with their current financial performance. However, Pacific should choose a few options to meet these requirements: first, they should acquire High Country Seasonings for $13.2 million since this is well below the $18 million book value of their equity, and the total value of the company would increase from the financial statements' consolidation. In addition, Pacific should…

Grossman suggests that the: cost of health capital = r + where r is the interest rate and is the depreciation rate. Thus as r decreases, the cost of health is decreasing as well. With lowered costs of health capital, the consumer does not have to spend as much to purchase health / medical services. In addition, because costs have decreased, consumer health increases at a higher optimal level than before, because the price…

business. 1) Cost Leadership- is a business strategy that mainly focuses on gaining advantage by reducing its costs below to those of its competitors. The main test for this strategy is to earn suitable profit by reducing costs. However, a firm pursuing cost leadership strategy focuses its efforts on keeping cost low. The main advantages of Cost leadership are:- - Economies of Scale – firms continue to grow but at definite rate. For example, if the volume of production increases, the average…

domestic items or products to be feasible, vary in many ways. One justification is due to costs being cheaper. For instance, manufacturing a car in ones home market may be a very expensive process. Turkey is a market that has been…

Jensen and Meckling develop theory in different stages 1. Introduction 2. Analysis the agency cost 3. Question regarding the organization & examiner the role of united liability 4. Provide basic concept agency cost 5. Brief summary and conclusions. Introduction. This article has been written by Jensen and Meckling in October 1976. This study inspects the property rights, agency and financial progress a theory of the ownership structure of the firm. The authors highlight on new matter which…

Abstract: The Port of Singapore has a multi-pricing structure. The costs are arranged in three categories: port-calling costs, terminal-handling costs and concession pricing. Port-calling costs are the costs of all services offered to the vessel, ranging from access to quay or terminal, to pilotage, to the supply of water and bunkering, i.e. they encompass all ship-handling costs. Terminal-handling costs comprise costs for loading or unloading, storage, customs clearance, repacking and…

project with a fixed budget of $2.2M over 10-months. This type of contract would be identified as a Firm Fixed Price (FFP) contract. This means that Gary would have no flexibility of the project costs if the price on any of the components increases. This implies that Gary and SEC would assume any risk, if cost of the good or services increases and is more than originally calculated for (Schwalbe, 2009, p.185). This would prove to be problematic for Gary as no additional funding would be made…

Harvard University and Wilbur Ross an international private equity investor suggests in their economic plan titled Scoring the Trump Economic Plan: Trade, Regulatory & Energy Policy Impacts, the plan begins with an estimate that Mr. Trump’s tax plan costs $4.4 trillion on a “static” basis, for example, before any effect on economic growth. However, that figure assumes Mr. Trump’s 15% corporate tax rate does not apply to businesses filing as individuals. On the other hand, Mr. Trump has…

know that every resources has an opportunity cost in order to calculate the firm’s economic costs properly. An implicit cost is an opportunity cost that doesn’t need to pay by the owner because a firm owner already own the resources for his firm. However, these resources has their own price. For example if a business owner buys a piece of land for building a house but he determines to use this land to make a bakery, he will face an indirect or implicit cost of this land to his bakery. As a…