FORMULA :

1. EOQ = √2SOc /Cc

2. Number of orders = S/ EOQ
3. Average inventory = S/EOQ + Safety stock
4. Total Inventory costs =
[ S/ EOQ ] * Oc + { [EOQ/2] + Safety stock } * Cc
5. Reorder point = {S/50 * delivery times }+ Safety stock

6. Payback period = Initial costs / Cash flows

7. Payback period =

Years + {Initial outlay – Cum CF yr before }

-----------------------------------------
{Cum CF year after – Cum CF year before}

8. Net present value (NPV)

= Cash flow (PVIFA i%,n) - Initial Costs

9. NPV = Total PV of Cashflows – Initial costs

10. Cost of issue common shares (Kcs)

= D1 + g
---------
Po – FC

11. D1 = Do * (1 +g)

12. Cost of issue preferred (Kps)

= Dividend
----------------------------------
Price – FC

13. Before tax costs of issue bond

kd = CR + PV – MP
n
----------------------
PV + MP
2

14. After tax costs = Before tax * ( 1- Tax rate)