6. XYZ company’s cost function for the next four months is C = 500,000+5Q
(a) Find the BE dollar volume of sales if the selling price is br. 6 / unit
(b) What would be the company’s cost if it decides to shut down operations for the next four months
(c) If, because of strike, the most the company can produce is br. 100,000 units, should it
shutdown? Why or why not?
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?
4. A manufacturing Co. has a Total Fixed Cost of Br. 20,000 & a Unit Variable Cost of Br.10. if the co. can
sell .What it produces at a price of Br. 20,
(a) Write the Revenue, cost & Profit functions
(b) Find the breakeven point in terms of quantity and sales volume
(c) Show diagrammatically the Total Revenue, Total Cost, Total Profit, Fixed Cost and
Variable Costs.
(d) Interpret the results
3. A firm sells a product for birr 60 per unit. Raw material cost are birr 13 per unit, laborcosts are birr 20 per
unit, and annual fixed costs are birr 340,000.
(a) Determine the profit function.
(b) How many units would have to sold to earn an annual profit of birr 240,000?
(c) Determine the amount of contribution to the fixed cost and profit, if the firm sells
10,000units.
Suppose we have birr 36 to spend on pork and chicken. If we buy P pounds of pork at birr 3per pound and C
pounds of chicken at birr 2 per pound.
(a) What would be our total expenditure equation?
(b) Write the above equations in (a) for C in terms of P and interpret the slope and
Y-intercept.
1. The chairman is trying to forecast the number of tourists who would be visiting the city of Adama in the coming year. Some students from Royal College have examined the problem as part of course project. They estimated the current year’s volume as 110,000 tourists. They have also projected that the volume in the next year will be 120,000 and the volume in the future will continues to grow at the same rate. Determine equation of a line which relates the number of tourists, P, to year’s t as measured from this current year?
Edwill just purchased a new home costing R1 107 900,00 by paying R120 000,00 cash on the purchase date,
and agreeing to make payments at the end of the following eight years for the remainder owed; the first
payment is due one year after the purchase date. The interest rate is 7,4% per annum, compounded yearly.
Considering the amortisation schedule, the percentage, rounded to two decimal places, of the total payments
made the first two years that will go toward repayment of interest, is
[1] 43,51%.
[2] 41,42%.
[3] 58,58%.
[4] 70,71%.
Round the answer to this question to the nearest rand. David borrowed R911 012,00 to refurbish his holiday
home. The loan requires monthly repayments over 12 years. When he borrowed the money, the interest rate
was 12,4% per annum, compounded monthly, but five years later the bank increased the annual interest rate
to 13,9%, in line with market rates. After five years the present value of the loan is R682 081,77. With the
new interest rate, his monthly payments will increase by
[1] R12 745,00
[2] R7 705,00
[3] R3 649,00
[4] R558,00
Heather deposited $100 at the end of every month into an RRSP for 5 years. The interest rate earned was 5% compounded daily. What was the accumulated value of the RRSP at the end of the 5 years? Round to the nearest cent.
Gary Rosenberg has a personal injury protection policy that covers each person in , on, around, or under his car for medical expenses as a result of an accident. Each person can collect up yo 50,000 Craig is jnvolved in an accident and three people are hurt 500 worth of medical expenses, and Craig himself had a medical expense totaling 70?000 how much money must the insurance company pay out for these three people