fin621 subjective final term paper spring July 2011

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Question No: 45 ( Marks: 3 )

How firms analyze their credit policies? Explain briefly.

Question No: 46 ( Marks: 5 )

How Economic Order Quantity (EOQ) Model is helpful in the reduction of total inventory costs?

Question No: 47 ( Marks: 5 )

Differentiate between Spot Rates and Forward Rates of currencies. Why forward rates are higher than spot rates?

Question No: 48 ( Marks: 5 )

How a firm can create a money market hedge against transaction exposure, when the firm has to make a payment at some future date?

Answer: .

Question No: 49 ( Marks: 10 )

A Firm sales 200,000 units per year of a particular Product, order size is for 5000 units and stock out is 3000 units. The stock out probability acceptance level is set to 5% and per unit stock out cost is Rs.7/-. Holding cost is estimated at Rs.3/- per unit. Being an inventory manager, determine stock out cost and amount of safety stock to be kept in hand.

Question No: 50 ( Marks: 10 )

Why firms do business internationally? Explain in detail.