About pricing through a channel of distribution

Assignment Help Financial Management

Reference no: EM13731919

Instructions

This problem is about pricing through a channel of distribution. The product is shoes. The total landed cost to the importer is $20 for a pair of shoes (to their warehouse from any manufacturer around the globe). You need to determine the selling price, the mark up in dollars and the margin (mark up expressed as a percent of cost or selling price depending upon what was desired) for each member of the distribution channel. Here is how each member of the channel prices shoes:

1. The importer wants a 50% mark up on the landed cost for each pair of shoes. the importer sells to the wholesaler.

2. The wholesaler wants a 25% mark up on their cost. The wholesaler buys shoes from the importer and sells to the retailer.

3. The retailer wants a mark up of 50% on the retailer's selling price. the retailer buys from the wholesaler and sells to people who shop at their store in the local mall.

4. How much the household shopper pay for a pair of shoes?

Now the retailer has a 20% return rate on shoes. So what is the retailers effective selling price, mark up and margin on each pair of shoes sold

Reference no: EM13731919

Questions Cloud

What is the maximum number of new shares of common stock : Aspin Corporation’s charter authorizes issuance of 2,900,000 shares of common stock. Currently, 1,200,000 shares are outstanding, and 400,000 shares are being held as treasury stock. The firm wishes to raise $104,500,000 for a plant expansion.

What is the current value of a share of stock : Squidward Tentacles & Co. will pay an annual dividend of $0.65 one year from now. The dividend is expected to grow at a 12% rate for the next 4 years and then settle down to a steady growth rate of 2% per year in perpetuity. If Squidward Tentacle’s r..

What is the current selling price : A $1,000 corporate bond with 10 years to maturity pays a coupon of 8% (semi-annual) and the market required rate of return is a) 7.2% and b) 10%. What is the current selling price for a) and b)? Worked this many ways by many suggestions and I am not ..

What should the value of equity be : Suppose you borrow $50000 when financing a coffee shop which is valued at $75000. You expect to generate a cash flow so $84000 if demand is as expected. The cost of debt is 4%. What should the value of equity be?

About pricing through a channel of distribution : This problem is about pricing through a channel of distribution. The product is shoes. The total landed cost to the importer is $20 for a pair of shoes (to their warehouse from any manufacturer around the globe).

Maximum price per share that newman should pay for grips : Newman manufacturing is considering a cash purchase of the stock of Grips Tool. During the year just completed, Grips earned $3.84 per share and paid cash dividends of $2.14 per share (D0= $2.14). Grips' earnings and dividends are expected to grow at..

What required rate of return for this stock would result : McCracken Roofing, Inc., common stock paid a dividend of $1.03 per share last year. The company expects earnings and dividends to grow at a rate of 6% per year for the foreseeable future. What required rate of return for this stock would result in a ..

What is the bond price if priced with the assumption : Callable bond. Corso Books has just sold a callable bond. It is a thirty year semi-annual bond with an annual coupon rate of 6% and $1,000 par value. Investors, however, can call the bond starting at the end of 10 years. If the yield to call on this ..

Deciding whether to add bard publishing to your portfolio : You are deciding whether to add Bard Publishing to your portfolio, but you are concerned about your projection for their growth rate. Bard's cost of equity capital (the discount rate for equity) is known to be 8% and they just paid a dividend of $4.7..

User Account

All Pages