Question
In: Finance
Problem (10 marks) a) Zoey Enterprises manufactures solar engines for helicopters. Given the fuel savings available,...
Problem
a) Zoey Enterprises manufactures solar engines for helicopters. Given the fuel savings available, new orders for 125 units have been made by customers requesting credit. The variable cost is $11,400 per unit, and the credit price is $13,000 each. Credit is extended for one period. The required return is 1.9 percent per period. If Zoey Enterprises extends credit, it expects that 30 percent of the customers will be repeat customers and place the same order every period forever, and the remaining customers will place one-time orders. Should credit be extended?
b) Now, assume that the probability of default is 15 percent. Should the orders be filled now? Assume the number of repeat customers is affected by the defaults. In other words, 30 percent of the customers who do not default are expected to be repeat customers.
(Please provide all the equation and step by step or Excel.xml in google drive )
(Please don't copy from another places, the answer will upload to Turnitin)
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Problem 6 (10 marks) a) Zoey Enterprises manufactures solar engines for helicopters. Given the fuel savings...
Problem 6
a) Zoey Enterprises manufactures solar engines for helicopters.
Given the fuel savings available, new orders for 125 units have
been made by customers requesting credit. The variable cost is
$11,400 per unit, and the credit price is $13,000 each. Credit is
extended for one period. The required return is 1.9 percent per
period. If Zoey Enterprises extends credit, it expects that 30
percent of the customers will be repeat customers and place the
same order every period forever,...
a) Zoey Enterprises manufactures solar engines for helicopters. Given the fuel savings available, new orders for...
a) Zoey Enterprises manufactures solar engines for helicopters.
Given the fuel savings available, new orders for 125 units have
been made by customers requesting credit. The variable cost is
$11,400 per unit, and the credit price is $13,000 each. Credit is
extended for one period. The required return is 1.9 percent per
period. If Zoey Enterprises extends credit, it expects that 30
percent of the customers will be repeat customers and place the
same order every period forever, and the...
please explain part b a) Zoey Enterprises manufactures solar engines for helicopters. Given the fuel savings...
please explain part b
a) Zoey Enterprises manufactures solar engines for helicopters.
Given the fuel savings available, new orders for 125 units have
been made by customers requesting credit. The variable cost is
$11,400 per unit, and the credit price is $13,000 each. Credit is
extended for one period. The required return is 1.9 percent per
period. If Zoey Enterprises extends credit, it expects that 30
percent of the customers will be repeat customers and place the
same order every...
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Solar Engines manufactures solar engines for tractor-trailers.
Given the fuel savings available, new orders for 105 units have
been made by customers requesting credit. The variable cost is
$8,400 per unit, and the credit price is $10,250 each. Credit is
extended for one period. The required return is 1.2 percent per
period and the probability of default is 15 percent. Assume the
number of repeat customers is affected by the defaults. In other
words, 30 percent of the customers who...
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Solar Engines manufactures solar engines for tractor-trailers.
Given the fuel savings available, new orders for 140 units have
been made by customers requesting credit. The variable cost is
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extended for one period. The required return is 1.9 percent per
period. If Solar Engines extends credit, it expects that 15 percent
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every period forever and the remaining...
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Problem 1: [10 Marks] Given a generic array with ‘n’ items (not only integers). Give a...
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Exercise 10-3 Make or Buy a Component [LO10-3] Troy Engines, Ltd., manufactures a variety of engines...
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Troy Engines, Ltd., manufactures a variety of engines for use in
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necessary parts for its engines, including all of the carburetors.
An outside supplier has offered to sell one type of carburetor to
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offer, Troy Engines, Ltd., has gathered the following information
relating to its own cost of producing...
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