Answer to Question #323283 in Financial Math for mafi

Question

5. A contractor purchases a piece of equipment for birr 30,000. The equipment requires an average expenditure

of birr 6 per hour for fuel and maintenance and the operator is paid birr 10 per hour. The customers are

charged birr 20 per hour for the use of the equipment. Required:

(a) Write the total cost, total revenue and total profit functions in terms of the number of

hours the machine is used.

(b) Find the number of hours the equipment must be operated for the contractor to breakeven.

(c) What will be the profit (loss) level if the machine is operated for 8,000hours?