Homework Wk 3 Assignment Example | Topics and Well Written Essays - 750 words

Homework Wk 3 - Assignment Examplea. US Treasury Bills Although it is the most liquid short-term security it is considered as risk-free investment. This could lead to potential detriment for corporations interchange management because the yields of these securities are nominal that may not be sufficient for current notes requirements.b. Ordinary Preferred Stock It allows a company to raise capital without diluting voting rights where the investor is eligible to collar regular dividends. This is in contrast to the nature of pure equity where investor shares risk of firm. This would require regular silver outflow by the firm.c. NCDs They allow the companies to raise capital from investors by promising returns at specified crop of interest on deposit. NCDs also allow the investor to trade security in stock markets so that investor may exit the option before maturity. But when the corporation is not able to earn regular cash as a result of which its weighted average constitute of capital exceeds interest earned because NCDs may become a burden for the corporate.d. Commercial Papers They are issued by corporations having good confidence ratings and market reputation allowing them to raise capital from investors directly without any intermediary (like banks). This reduces the cost of borrowing besides requires company to repay investor at own expense.From given information if the cost of carrying per phone is $26 per class and fixed order cost is $340 then carrying cost per phone is just about 13.08 (that is, 340/26) and total carrying cost for 740 phones is approximately $9676.92 (that is, 13.08 x 740).From the above calculations it is clear that the company should increase order size as the storage cost is cheaper than cost of carry. Also, the optimal inventory policy would require the company to produce 38 phones since, 2 x 740 x (340/26) = 38.04.JIT inventory management system allows manufacturer to eliminate