Ask Experts Questions for FREE Help !
Ask
    jhevtan's Avatar
    jhevtan Posts: 2, Reputation: 1
    New Member
     
    #1

    Aug 13, 2014, 07:19 PM
    Finance question
    You want to determine how many bunches of radishes you want to buy each day. Here's what you know.
    1. You sell radishes (the sale price) for a dollar a bunch.
    2. You purchase radishes (the cost price) for 50 cents a bunch to sell
    3. A farmer will purchase the old radishes for a dime a bunch to grind up for his farm animals.
    4. You sell about 20 bunches a day.
    5. The standard deviation (that give and take of how many you sell every day... some days 17, some days 25, some days 19) is 3.
    So, you'll want to know based on the above, how many bunches your next order should be. (50 points).
    First, find the cost per unit or sale price minus cost price = C(u)
    Second, find the difference of the cost price minus the price the famer will pay = C(o)
    Third, find the purchase requirements by doing these steps:
    a. C(u)/C(o) +C(u) = P (only go out to four decimal places) (HINT: This must be less than one
    smoothy's Avatar
    smoothy Posts: 25,492, Reputation: 2853
    Uber Member
     
    #2

    Aug 13, 2014, 07:32 PM
    Since we don't do your assignments, we only help once you have shown us your work FIRST. WHat is your answer.
    jhevtan's Avatar
    jhevtan Posts: 2, Reputation: 1
    New Member
     
    #3

    Aug 13, 2014, 08:42 PM
    Thank you for responding, the answer I came up with is incorrect since it has to be under 1
    1.00-.50=.50 for c(u)
    .50-.10=.40 c(o)

    .50/.40+.50= 1.75
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
    Senior Member
     
    #4

    Aug 17, 2014, 08:47 AM
    Kind of late for the party, but FWIW, your probability "ceiling" for a problem like this is given by the ratio
    L / (L + P)

    where L and P are, respectively, the net loss incurred on an unsold unit and the net profit earned on a sold unit (here, 0.4 and 0.5).

    You're coming out of the starting gate a little sideways by (1) using P instead of L in the numerator; and (2) mis-stating your denominator (avoided by paying close attention to parentheses).

    Ah-ite, back to you.

    (Ya know, on second thought, I suppose you could use P in the num'r, just keep in mind that you're then getting the complement of the probability "ceiling", and so handle your z-score calcs accordingly. But the bit about the denominator stands.)

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Finance Question [ 0 Answers ]

John Box Inc. has an annual interest expense of $30,000 and pays income tax equal to 40 percent of taxable income (EBT). John Box's investment earned ration is 4.2. What is John Box's net income?

Finance question [ 1 Answers ]

Madison Metals recently reported $9000 of sales, $6000 of operating costs other than depreciation, and $1500 of depreciation. The company had no amortization charges and non-operating income. It had issued $4000 of bonds that carry a 7% interest rate, and its federal- plus- state income tax rate...

Finance question? Please help [ 5 Answers ]

1. Interpret, in words, what cash flow from assets represents by discussing operating cash flow, changes in net working capital, and additions to fixed assets. 2. How can you determine if a firm is self-sustaining by reviewing the firm's cash flow from assets? 3. Discuss the...

Finance Question [ 0 Answers ]

La Familia Company limited is considering the purchase a high speed drill to replace the old one that they currently have. The old drill was purchase 3 years ago at an installed cost of $500,000 and is estimated to have a usable life of 5 years. The new drill is expected to cost $850,000...

Finance question help [ 1 Answers ]

A representative of a financial institution offers you two alternative financial investments, namely Investment A and Investment B. If you go ahead with Investment A, you have to invest £5,000 now and you will receive £7,000 in 5 years' time. If you choose Investment B, you are required to invest...


View more questions Search