Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. What are the Benefits of Holding Inventories?
(1) Timing of Demand and Supply: - Requirement to hold inventory of raw materials arises because it isn't possible for a firm to procure raw materials whenever it is needed. If the firm is guaranteed of supply of raw material without delay at the rate it is used in its manufacturing process it need not to hold stock of raw materials. However in actual practice a time lag exists between demand of raw materials in manufacturing process as well as its supply. Provider of raw material to the firm mat as well is delayed because of such factors as transport problems, strike, short supply etc. Thus the firm must maintain adequate inventory of raw material to run its manufacturing process regularly. Likewise need to hold inventory of finished goods arises because the rate of manufacturing and the rate of sale don't match. A firm can't manufacture the goods immediately on demand by customers.
(2) Quantity Discounts: - Raw materials are necessary as and when production process is run. However instead of procuring raw materials in small quantities at the time of each production run firm may purchase large quantities of raw material in advance to acquire quantity discounts of bulk purchasing. This results in a important saving in costs.
(3) Expectancy of Price Rise: - Anticipation of price rise may as well necessitate purchasing and holding of raw material inventories.
(4) Reducing Ordering Cost: - These costs comprise the cost of preparing transporting cost, purchase orders, receiving costs, inspecting costs etc.
These cost raise in proportion to number of order placed. Thus a firm may purchase raw materials in excess of its immediate requirements by placing one bulk order to reduce the ordering costs. This as well results in accumulation of raw material inventory.
Provide an argument for including or not current liabilities in the cost of capital calculation.
Define the P/E valuation method. Under what circumstances should a stock be valued using this method? The P/E ratio points out how much investor are willing to pay for each dol
Stock A has settled into a constant dividend growth pattern of 6 percent per year. The current dividend is $1.50, its current price is $15.90. You are an analyst and believe that
A portfolio manager would never prefer to make investment decision based on just one set of assumptions. Instead, he would evaluate the outcome of the selected st
Q. What is usual Approach of capital Structure? Ans. Traditional Approach: - The traditional approach establishes middle among the Net Income approach and the Net Operating Inc
How can an industrial company inflate the value of its inventory so as to decrease net income and the taxes is has to pay that year? If a company increases the value of its inv
Types of Traders in Future and Option Markets: Hedgers Hedgers use the futures and options market principally for risk management purposes because of their exposure to pri
#The following items are found in the The following items are found in the trial balance of M/s Sharada Enterprise on 31st December, 2000.
Reasons for Growth of Hedge Funds Many Hedge Fund strategies have the ability to generate positive returns in both rising and falling equity and bond markets. Inclusion of Hedg
Profit maximization Traditionally, this was considered to be the major goal of the firm. Profit maximization refers to attaining the maximum possible profits throughout the yea
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd