Cost trade-offs in short-term financial management

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Reference no: EM131178460

Cost Trade-Offs in Short-Term Financial Management Geet Industries wants to install a just-in-time (JIT) inventory system in order to significantly reduce its in-process inventories. The annual cost of the system is gauged to be $91,000. The financial manager estimates that with this system, the firm's average inventory investment will decline by 37% from its current level of $2.05 million. All other costs are expected to be unaffected by this system. The firm can earn 14% per year on equal-risk investments. What is the annual cost savings expected to result from installation of the proposed JIT system? Round your answer to the nearest whole dollar. $ per year Should the firm install the system?

Reference no: EM131178460

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