Reference no: EM132971029
Question - Telex Petroleum Plc is a manufacturing groups. It is operating on divisional structure. Imperial, the group's supplying division, sold barrel of refined petrol to the buying division, Maven. Maven can also buy from external supplier - Lance Petrol Ltd.
The Imperial division operating at full capacity producing 10,000 barrels of refine petrol. Out of this, 8,000 barrels were sold to external market at £50 per barrel and 2,000 barrels to Maven division at £40 per barrel. The Variable cost is £25.
Maven was approach by Lance Petrol to buy similar refined petrol at a price of £35 per barrel.
For the purpose of calculating the internal profit, Imperial allocated the total annual fixed of £80,000 as 70% to external and 30% to Maven.
Required -
a) Calculate the profits of the group and Imperial if Maven division decided to take the Imperial offer and at the same time Imperial sold to the external.
b) Calculate the effect on imperial's contribution and the group profit if Maven accept Lance petrol 's offer.
How much should be allocated abulencia
: Abulencia and Daguiso have the following profit and loss agreement: salaries of P30,000. How much should be allocated Abulencia
|
What is the new cost of equity capital
: The risk-free rate is 5%, and the expected market risk premium (rM - rf) is 10%. What is the new cost of equity capital
|
Discuss the project risk
: Select past 5 year past revenue data of a firm. Assume 0.5% of yearly income is from a project. Discuss the project risk
|
What is the forward rate for the two year period
: The 1-year, 2-year, 3-year, and 4-year risk-free zero rates are 4%, 4.5%, 4.75%, and 5% with annual compounding. What is the forward rate
|
Calculate the profits of the group and imperial
: Calculate the profits of the group and Imperial if Maven division decided to take the Imperial offer and at the same time Imperial sold to the external
|
Give an advice to lusty lite
: Six month call and put options are quoted at a strike price of €0.9550/US$. Give an advice to Lusty Lite in terms of her best hedging alternative
|
What is the retailer effective cost of trade credit
: A large retailer obtains merchandise under the credit terms of 2/15, net 45, What is the retailer effective cost of trade credit
|
What are benefits of risk-adjusted rate of return
: What are the benefits and limitations of risk-adjusted rate of return technique as one of the approaches that helps deal with risk
|
Re-compute basic and diluted eps
: Shaffer Corporation issued $100,000, 10% convertible bonds in 2019 at face value. Re-compute basic and diluted EPS
|