Estimated relationship between inventories and sales

Assignment Help Financial Management
Reference no: EM131554757

Jasper Jewelry has $170 million in sales. The company expects that its sales will increase 4% this year. Jasper's CFO uses a simple linear regression to forecast the company's inventory level for a given level of projected sales. On the basis of recent history, the estimated relationship between inventories and sales (in millions of dollars) is as follows:

Inventories = $9 + 0.09(Sales)

Given the estimated sales forecast and the estimated relationship between inventories and sales, what is your forecast of the company's year-end inventory level? Round your answer to two decimal places. Do not round intermediate calculations.

Reference no: EM131554757

Questions Cloud

Forecast additional funds beasley will need for coming year : Using the AFN equation, forecast the additional funds Beasley will need for the coming year.
Unfair advantage in global markets : The U.S. has long criticized Beijing’s policymakers of keeping Yuan artificially cheap to give Chinese exports unfair advantage in global markets.
Determine the cost of the standardized recipe : Determine the cost of the following standardized recipe. calculating the extension cost, the total cost and the cost per serving.
Find the bid price : The required rate of return is 13% and taxes are 18%. Find the Bid Price?
Estimated relationship between inventories and sales : Jasper Jewelry has $170 million in sales. Given the estimated sales forecast and the estimated relationship between inventories and sales,
What is target fixed assets and sales ratio : What is Mitchell's Target fixed assets/Sales ratio? What level of sales could Mitchell have obtained if it had been operating at full capacity?
Economic factors commonly affect personal financial decision : What personal and economic factors commonly affect your personal financial decisions?
What is the purpose of letter to shareholders : What events necessitated the passage the Sarbanes-Oxley Act? What is the purpose of a letter to shareholders?
What is the total cost of principal-interest-discount points : What is the total cost of principal, interest, and discount points?

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate the MIRR of project using discounting approach

Calculate the MIRR of the project using the discounting approach.

  Which is projected to decrease this years labor costs

What is the maximum you could afford to spend (P0) on an electronic device that is guaranteed for ten years (N) which is projected to decrease this year's labor costs by $8000 if you expect labor costs to increase 5% per year and you use 10% (i) as y..

  Based on the black-scholes option pricing model

The current stock price of Alcoa is $70 and the stock does not pay dividends. The instantaneous riskfree rate of return is 6%. The instantaneous standard deviation of Alcoa's stock is 30%. You wish to purchase a call option on this stock with an exer..

  Education while minimizing any transfer taxes

Martha, a 75-year-old widow, owns more than $8 million in assets. Martha’s son, Jonathan, has two children, ages 10 and 13. Her daughter, Annie, also has two children, ages 9 and 13. What planning opportunities can you suggest so that Martha can prov..

  Common stocks while marvin invested in corporate bonds

Your nephews Ricky and Marvin FiftyCent differ in investment philosophies—Marvin is conservative and Ricky holds a moderate investing outlook. Their father left each of them $100,000 when he died ten years ago, and Ricky invested in common stocks whi..

  Replacing existing equipment with new equipment

Company is replacing existing equipment with new equipment which can replicate what the existing machine does and also support a new product line.

  What must the risk-free rate be

A stock has an expected return of 15 percent, its beta is 1.35, and the expected return on the market is 13 percent. What must the risk-free rate be? (Do not round your intermediate calculations.)

  Current rate be on three-year treasury securities

If the liquidity premium theory is correct, what should the current rate be on 3-year Treasury securities?

  What is the quick ratio

Galaxy United, Inc. 2009 Income Statement ($ in millions) Net sales $8,500 Less: Cost of goods sold 7,210 Less: Depreciation 400 Earnings before interest and taxes 890 Less: Interest paid 86 Taxable Income 804 Less: What is the quick ratio for 2009? ..

  What tax rate is required to meet the budgetary demands

What tax rate is required to meet the budgetary demands?

  What is the matching principle of working capital financing

Develop a plan that integrates effective financial and operational decision making to successfully meet communication challenge in any Organization. If you know the cap rate and NOI what would be the formula for calculating value? What is the matchin..

  Calculate the effective borrowing cost

Given the following information, calculate the Effective Borrowing Cost (EBC). Loan amount: $175,000, Term: 30 years, Interest rate: 7 %, Payment: $1,164.28, Discount points: 1, Origination fee: $3,250. Assume the loan is held until the end of year 1..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd