Radovilsky Manufacturing Company, in Hayward, California, makes flashing lights for toys. The company operates
its production facility 300 days per year. It has orders for about
12,000 flashing lights per year and has the capability of producing
100 per day. Setting up the light production costs $50. The cost of
each light is $1. The holding cost is $0.10 per light per year.
a) What is the optimal size of the production run?
b) What is the average holding cost per year?
c) What is the average setup cost per year?
d) What is the total cost per year, including the cost of the
lights?

Examine the following book-value balance sheet for university products inc. the preferred stock currently sells for $30 per share and pays a dividend of $3 a share. the common stock sells for $16 per share and has a beta of 0.9. there are 2 million common shares outstanding. the market risk premium is 9%, the risk-free rate is 5%, and the firm’s tax rate is 40%. book-value balance sheet (figures in $ millions) assets liabilities and net worth cash and short-term securities $ 2.0 bonds, coupon = 6%, paid annually (maturity = 10 years, current yield to maturity = 8%) $ 5.0 accounts receivable 3.0 preferred stock (par value $15 per share) 3.0 inventories 7.0 common stock (par value $0.20) 0.4 plant and equipment 21.0 additional paid-in stockholders’ equity 13.6 retained earnings 11.0 total $ 33.0 total $ 33.0 a. what is the market debt-to-value ratio of the firm? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places.) b. what is university’s wacc? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places.)