Question

Estimates of the financial information for a new product show the following information:

Units Sold Probability Fixed cost Rs. 8,000
600 .35 Variable cost Rs. 6 / unit
800 .45 Revenue Rs. 22 / unit
1000 .20

Use the random numbers .51, .97, .58, .22, and .16 to simulate five trials. What is the net profit for each trial?

Answer 1

Answer on Question #44590 – Math - Other

Problem.

Estimates of the financial information for a new product show the following information:

Units Sold Probability Fixed cost Rs. 8,000

600 .35 Variable cost Rs. 6 / unit

800 .45 Revenue Rs. 22 / unit

1000 .20

Use the random numbers .51, .97, .58, .22, and .16 to simulate five trials. What is the net profit for each trial?

Remark.

The statement isn't correctly formatted. I suppose that the correct statement is

"Estimates of the financial information for a new product show the following information:

Use the random numbers .51, .97, .58, .22, and .16 to simulate five trials. What is the net profit for each trial?"

Solution.

$$\text{Units sold} = \left\{ \begin{array}{l} 600, \text{ if Random Number} \leq 0.35; \\ 800, \text{ if } 0.35 < \text{ Random Number} \leq 0.35 + 0.45 = 0.8; \\ 1000, \text{ if } 0.8 < \text{ Random Number} \leq 1. \end{array} \right.$$

Revenue = Units sold × Revenue per unit.

Variable cost = Units sold × Variable cost per unit.

Net Profit = Revenue - Variable cost - Fixed cost.

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