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inna [77]
2 years ago
7

Amy is in school learning to be a welder. she spends long hours studying (and drinking coffee), and long hours practicing in the

hot, dirty shop (and therefore takes frequent showers). amy has $70.00 a month to spend on the soap and coffee she needs to function properly. draw amy\'s budget constraint, assuming the soap costs $3.50, and the coffee costs $14.00 a pound. note, if a point will not go where you want to put it, try placing the other endpoint there.
Business
1 answer:
vazorg [7]2 years ago
3 0
For this case, the first thing you should do is define the variables of the problem.
 We have then:
 x: amount of soap.
 y: amount of coffee.
 The budgetary restriction in this case is the following inequality:
 3.50x + 14y <= 70
 answer:
 3.50x + 14y <= 70
You might be interested in
What is the present value of the future cash flows, if you also could earn $110,000 per year rent on the property? The rent is p
dem82 [27]

Answer:

a. The present value of the sales price is $1.657 million.

b. No. This is because an investment in the property will result in a negative net present value (NPV) of $0.443 million.

c-1. The present value of the future cash flows is $2.122 million.

c-2. Yes. Yes. This is because an investment in the property will result in a positive net present value (NPV) of $0.022 million.

Explanation:

Note: This question is not complete. The complete question is therefore presented before answering the question as follows:

You can buy property today for $2.1 million and sell it in 6 years for $3.1 million. (You earn no rental income on the property.)

a. If the interest rate is 11%, what is the present value of the sales price? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)

b. Is the property investment attractive to you?

c-1. What is the present value of the future cash flows, if you also could earn $110,000 per year rent on the property? The rent is paid at the end of each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)

c-2. Is the property investment attractive to you now?

The explanation to the answers is now provided as follows:

a. If the interest rate is 11%, what is the present value of the sales price? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)

The present value of the sales price can be calculated using the simple present value formula as follows:

PV = FV / (1 + r)^n ……………………….. (1)

Where;

PV = Present value of the sales price = ?

FV = Future value or the sales price in 6 years = $3.1 million

r = interest rate = 11%, or 0.11

n = number of years = 6

Substitute the values into equation (1), we have:

PV = $3.1 / (1 + 0.11)^6

PV = $3.1 / 1.11^6

PV = $3.1 / 1.870414552161

PV = $1.65738659187525 million

Rounding to 3 decimal places, we have:

PV = $1.657 million

Therefore, the present value of the sales price is $1.657 million.

b. Is the property investment attractive to you?

No. This is because an investment in the property will result in a negative net present value (NPV) of $0.443 million.

The negative net present value (NPV) of $0.443 million is determined as follows:

NPV = Present value of the sales price - Acquisition cost = $1.657 million - $2.1 million = -$0.443 million

c-1. What is the present value of the future cash flows, if you also could earn $110,000 per year rent on the property? The rent is paid at the end of each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)

The present value of the future cash flows can be calculated using the following steps:

<u>Step 1: Calculation of the present value of the $110,000 per year rent</u>

Since the rent is paid at end of each year, this can be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PVR = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (2)

Where;

PVR = Present value of yearly rent = ?

P = Annual rent =$110,000

r = interest rate = 11%, or 0.11

n = number of years = 6

Substitute the values into equation (2) to have:

PVR = $110,000 * ((1 - (1 / (1 + 0.11))^6) / 0.11)

PVR = $110,000 * 4.23053785373826

PVR = $465,359.163911209

Converting to million and rounded to 3 decimal places, we have:

PVR = $0.465 million

<u>Step 2: Calculation of the present value of the future cash flows</u>

Present value of future cash flows = Present value sales price + Present value of annual rent ……. (3)

Where;

Present value sales price = $1.657 million, as already calculate in part a above

Present value of annual rent = PVR = $0.465 million

Substituting the values into equation (3), we have:

Present value of future cash flows = $1.657 million + $0.465 million = $2.122 million

Therefore, the present value of the future cash flows is $2.122 million.

c-2. Is the property investment attractive to you now?

Yes. This is because an investment in the property will result in a positive net present value (NPV) of $0.022 million.

The positive net present value (NPV) of $0.022 million is determined as follows:

NPV = Present value of tof the future cash flows - Acquisition cost = $2.122 million - $2.1 million = 0.0219999999999998 million

Converting to million and rounded to 3 decimal places, we have:

NPV = $0.022 million

6 0
2 years ago
Yellow​ Press, Inc., buys paper in​ 1,500-pound rolls for printing. Annual demand is 3 comma 000 3,000 rolls. The cost per roll
GenaCL600 [577]

Answer:

59 orders

Explanation:

For computing the how many rolls should order at a time, first we have to determine the economic order quantity which is shown below:

The computation of the economic order quantity is shown below:

= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}

where,

Carrying cost = $875 × 20% = $175

And, other items values would remain the same

ow put these values to the above formula

So, the value would be equal to

= \sqrt{\frac{2\times \text{3,000}\times \text{\$75}}{\text{\$175}}}

= 50.71 units

Now The number of orders would be equal to

= Annual demand ÷ economic order quantity

= $3,000 ÷ 50.71 units

= 59 orders

7 0
2 years ago
The Work in Process Inventory account had a beginning balance of $16,200 on April 1. During April, the cost of direct materials
zhenek [66]

Answer:

$28,700

Explanation:

We know that

Ending work in process inventory = Opening work in process inventory + total manufacturing cost - cost of finished goods manufactured

where,

Total manufacturing cost = cost of direct materials used + direct labor cost + overhead  cost

= $408,000 + $56,000 + $72,000

= $536,000

So, the ending work in process inventory would be

= $16,200 + $536,000 - $523,500

= $28,700

4 0
2 years ago
Zan Azlett and Angela Zesiger have joined forces to start​ A&amp;Z Lettuce​ Products, a processor of packaged shredded lettuce f
krek1111 [17]

Answer:

<u>a. The​ break-even quantity in units for manual process= 26,786 bags</u>

<u>b. $80,358</u>

<u>c. 36,000 bags</u>

<u>d. $108,000</u>

<u>e. $53,000</u>

<u>f. $58,000</u>

<u> g. 26,786 bags</u>

<u>h. mechanized process, manual process.</u>

Explanation:

a. Using the formula

Fixed Costs ÷ (Revenue per Unit – Variable Cost per Unit)

= $ 37, 500÷$3- $ 1.60

=26,786

b. Using the formula

Break-Even Point (sales dollars) = Fixed Costs ÷ Contribution Margin

where Contribution Margin = Price of Product – Variable Costs

=37, 500÷($3- $ 1.60)

=26,786 x $3= $80,358

c. Using the formula

Fixed Costs ÷ (Revenue per Unit – Variable Cost per Unit)

= $ 72,000÷$3- $1

=36,000 bags

d. Using the formula

Fixed Costs ÷ Contribution Margin

where Contribution Margin = Price of Product – Variable Costs

= $ 72,000÷($3- $1)

=36,000 bags x $3= $108,000

e. 65,000 bags x $3-$1.60= $91,000-$37,500 (manual process fixed cost)

= $53,000

f. 65,000 bags x $3-$1= $130,000-$72,000 (manual process fixed cost)

= $58,000

h. The mechanized process option should be chosen as this would bring more returns if the demand exceeds the point of​ indifference and the <u>manual process if the demand stays below the point of​ indifference.</u>

8 0
2 years ago
Jennifer deposited $1,750 in a saving account that earns 1.9% simple interest. How much interest has Jennifer earned by the end
Sergeu [11.5K]
Simple interest formula
I=PRT
I=interest
P=principal=amount invested
R=rate in decimal
T=time in years



we are given
P=1750
R=1.9%=0.019
T=1

I=PRT
I=(1750)(0.019)(1)
I=33.25

that's how much interest

total will be $1750+interest=$1750+$33.25=$1783.25

your answer is right
8 0
2 years ago
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