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O'Hare Company Is in the Process of Preparing a Purchases

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O'Hare Company is in the process of preparing a purchases budget for the first quarter of Year 2. The company has budgeted sales as follows:  Dec. Year 1 $44,000 Jan. Year 2 $46,500 Feb. Year 2 $51,000 Mar. Year 2$61,500\begin{array} { | l | l r | } \hline \text { Dec. Year 1 } & \$ & 44,000 \\\hline \text { Jan. Year 2 } & \$ & 46,500 \\\hline \text { Feb. Year 2 } & \$ & 51,000 \\\hline \text { Mar. Year } 2 & \$ & 61,500 \\\hline\end{array} Cost of goods sold is expected to be 75% of sales. The company would like to have ending inventory each month equal to 25% of the following month's predicted cost of sales. The total cost of purchases in January Year 2 is:

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Definitions:

Alpha Coefficient

A measure of the performance on a risk-adjusted basis, calculating how much a portfolio or investment has returned in comparison to the overall market or a benchmark index.

Beta Coefficient

An indicator of how much a stock's price fluctuates in comparison to the general market, representing its risk relative to the market norm.

Treynor-Black Model

A portfolio optimization model that blends passive and active management strategies to try to achieve excess returns with an acceptable level of risk.

Alpha Coefficient

A measure of the performance on a risk-adjusted basis of an investment portfolio, indicating excess return over the benchmark.

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