Andy Mendoza makes handcrafted dolls, which he sells at craft fairs. He is considering mass-producing the dolls to sell in stores. He estimates that the initial investment for plant and equipment will be $15,000, while labor, materials, packaging, and shipping will be about $4 per doll. He has determined that monthly sales volume is related to price, according to the following equation: v = 1000 - 20p + (1000/p) Find the optimal price, the optimal volume, and the
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- MR is a manufacturer of industrial fridges, freezers, and air conditioners. In December, the productionplanner needs to submit a production plan to the plant manager for the next year. The aggregate forecast foreach quarter of next year is Q1: 14,800; Q2: 26,400; Q3: 35,000, and Q4: 19,200 units. The beginning inventoryin January is 0, and the year-end inventory in December of next year can be 0. It costs MR $24 to hold anappliance in inventory for one quarter. Shortages are undesirable. Assume that all shortage will be backordered, and that back-order cost is $100 per unit per quarter. There are 160 permanent workers who produce19,200 units per quarter. In busy quarters, workers can produce up to 9,600 additional units during overtime.Regular time labour cost is $60 per unit appliance and overtime labour cost is $83 per unit. MR can hire up to160 temporary workers for a second shift. Assume temporary workers have the same productivity and canproduce up to 19,200 units per quarter. A…Q5) A firm is planning to manufacture a new product. The sales department estimates that the quantity that can be sold depends on the selling price. As the selling price is increased, the quantity that can be sold decreases. Numerically they estimate: P = $35.00 - 0.02Q where P =selling price per unit Q = quantity sold per year On the other hand, the management estimates that the average cost of manufacturing and selling the product will decrease as the quantity sold increases. They estimate C = $4.00Q + $8000 where C = cost to produce and sell Q per year The firm's management wishes to produce and sell the product at the rate that will maximize profit, that is, where income minus cost will be a maximum. What quantity should the decision makers plan to produce and sell each year?The following are data from a production, calculate; The Break-even point in terms of sales value and in . The production demand is at 20,000 units. What is the cw1ent production profit? If the management decides to lower dow11its selling price by 50% given the same demand, will this be a sound decision? Justify. Monthly Fixed Factory Overhead Cost = P600,000 Monthly Fixed Selling Overhead Cost = Pl20,000 Va1iable Manufacturing Cost per Unit = P220 Va1iable Selling Cost per Unit = P30 Variable Distribution Cost per Units = P50 Selling Price per limit = P400
- Your firm has discovered a cheap and efficient technology of turning used plasticbottles and bags into various products. You limit your attention to the following twoproduction opportunities: you can produce plastic utensils or helmets forBoilermakers' fans. In the first case your estimated annual revenue is K25,000, whilethe production will cost you K8,000. However, in your second option, you expect tosell 2000 helmets every year at K10 each, and the average total cost of every helmetwill be K2.a. Which production opportunity will you choose and why? b. If you do so, what will be your economic profit if your answer is lower explain technically why it is so?The monthly demand for ice cans being manufactured by Mr. Camus is 3200pieces. With a manual operated guillotine, the unit cutting cost is P25.00. An electricallyoperated hydraulic guillotine was offered to Mr. Camus at a price of P275,000.00 andwhich cuts by 30% the unit cutting cost. Disregarding the cost of money, how manymonths will Mr. Camus be able to recover the cost of the machine if he decides to buynow?· A. 10 months· B. 11 months· C. 12 months· D. 13 months"All growth models. You are evaluating the potential purchase of a small company that currently generates $42,500 in cash flow after taxes (D0 = $42,500). Based on a review of similar risk investment opportunities, you should earn a return rate of 18% from the proposed purchase. Since you're not very sure about future cash flows, you decide to calculate the value of the company assuming some possibilities for the cash flow growth rate. a) What is the value of the company if cash flows are expected to grow at an annual rate of 0% from now on? b) What is the value of the company if cash flows are expected to grow at a constant annual rate of 7% from now on? c) What is the value of the company if cash flows are expected to grow at an annual rate of 12% for the first 2 years and then, starting from year 3, the growth rate decreases to a constant annual rate of 7%?"
- A man is considering putting up his own enterprise, where an investment of 800,000 will be required and will take 15 years to recoup. He estimates his annual sales at 800,000 along with the following operating costs. Materials =160,000/ yearLabor = 280,000/ yearOverhead = (40,000 + 10% of sales)/ yearSelling Expense = 60,000/ yearThe man will give up his regular job paying 216,000 Php per year and devote all his time to the operation of his business, this will result in decreasing his labor cost by 40,000 per year, material cost by 28,000 per year and overhead cost by 32,000 per year. If the man expects to earn at least 20% of his capital, should he invest? Solve using a) Rate of return method b) annual worth method c)present worth method d)equivalent uniform annual cost methodA study by the New York Federal Reserve Bank concludes that an engineering bachelor’s degree generates approximately a 15% return on investment over the course of a decade. Suppose the typical engineering student spends $15,000 per year for four years on his/her education. What extra annual return (in dollars) does the typical student realize during the 10 years following graduation? State your assumptions.Mask King is a producer of disposable face masks in Country Z. She is deciding whether to upgrade the quality of her face masks from Level I to Level III by using nano-technology she has been researching on since the last few years. When considering the upgrade of the product quality, the main relevant information are given as follows: i. Mask King paid $2 million for the research cost used in the relevant nanotechnology in the past few years; ii. A new production line has to be established, including the purchase of new tools and equipment, which estimated to be cost $5 million; iii. An increase in income of $6 million is expected from selling the upgraded Level III face masks. Using the concept of opportunity cost, explain whether Mask King should upgrade her face masks
- Biovac is a bio-pharmaceutical company based in Cape Town, that is the result of apartnership formed with the South African government in 2003 to establish local vaccinemanufacturing capability for the provision of vaccines for national health management andsecurity. On the 21st of July 2021, Biovac and Pfizer announced that the Pfizer COVID-19vaccine will be produced in Cape Town by the Biovac Institute. Biovac has to now decide onthe production of the Pfizer vaccine and all other vaccines, on a graph illustrate and explain theopportunity cost of producing the Pfizer Covid-19 vaccine.A man is considering putting up his own enterprise, where an investment of 800,000Php will be required and will take 15 years to recoup . He estimates his annual sales at 800,000Php along with the following operating costs. Materials ............................. 160,000Php/ yearLabor ............................. 280,000Php/ yearOverhead ............................. (40,000 + 10% of sales) Php/ yearSelling Expense............................. 60,000Php/ yearThe man will give up his regular job paying 216,000 Php per year and devote all his time to the operation of his business, this will result in decreasing his labor cost by 40,000Php per year, material cost by 28,000Php per year and overhead cost by 32,000 Php per year. If the man expects to earn at least 20% of his capital, should he invest? solve in the present worth cost methodIf the profit function for selling smart phone screen magnifier is -4500p2 + 561500p – 11898000, what is the maximum profit that can be expected from selling smart phone screen magnifiers? Question 1 options: $ 0, no profit $ 5,617,681 $ 1,717,764 -$ 8,004,171