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Week One Homework Assignment
Name of the Student
Name of the University
Week One Homework Assignment
Q1)
Retread Tire Company
Total cost = Fixed cost+Variable cost
Total cost = 65000+112500
Total cost = $177500
Revenue = 15000*25
Revenue = $375000
Profit/Loss = 375000-177500
Profit/Loss = $197500
Contribution per unit = 25-7.5
Contribution per unit = 17.5
Break even volume = 65000/17.5
Break even volume = 3714 units
Q2)
Evergreen Fertilizer Company
Monthly break even volume = 250000.45-0.20
Monthly break even volume = 100000 units
Q3)
Evergreen Fertilizer Company
With price change
Monthly break even volume = 250000.55-0.20
Monthly break even volume = 71429 units
Q4)
Evergreen Fertilizer Company
Effect of advertising expenditure
Monthly break even volume = 25000+100000.55-0.20
Monthly break even volume = 100000 units
Q5)
Annie MaCoy
Break even Price = 3000+35001500+0.40
Break even Price = $4.73
Factors such as quality of food, the prices the competitors are offering for the same product and the level of occupancy of the stadium can have an effect on the volume sold.
Q6)
Kerouac University
Break even volume = 40000020000-10000
Break even volume = 40 students
Revenue = 80*20000
Revenue = $1600000
Total cost = 10000*80
Total cost = $800000
Profit/Loss = 1600000-800000
Profit/Loss = $800000
Increase tuition to $25000
Reduce enrollment to 50
Revenue = 50*25000
Revenue = $1250000
Total cost = 50*10000
Total cost = $500000
Profit/Loss = 1250000-500000
Profit/Loss = $750,000
This option will cost the university $50,000 in loss. This would not be a suitable option to go for.
Q7)
Probability for grade management
Expected value = 4*0.1+3*0.2+2*0.4+1*0.2+0*0.1
Expected value = 2
This makes the expected grade to be at C
Variance = 42*0.1+32*0.2+22*0.4+12*0.2+02*0.1-(2)^2
Variance = 5.2-4
Variance = 1.2
Q8)
Investment firm
Expected value of good = 380000*0.60+130000*0.60
Expected value of good = $306000
Expected value of poor = 100000*0.40+85000*0.40
Expected value of poor = $74000
Taking the expected value of both the conditions into account, choosing the good option will prove beneficial for the firm.
Q9)
Fertilizer bags
In order to find this, the z value needs to be found first.
Z = x-meanstandard deviation
Z = 38-455
Z = -1.4
Z = 50-455
Z = 1
The probability for z is in between -1.4 to 1
Using the table, the probability that the weight would be in between 38 and 50 pounds is 0.7606
Q10)
Polo Development Firm
Z = 18-155
Z = 0.6
The probability is around 0.7257 that people will not be able to occupy in 18 months.
Q11)
National Video Store
Mean = 175
Standard Deviation = 55
Area under curve to be equal to 0.85 = 0.85-1.00 = 0.75
Value for 0.75 on the table gives a z value of = 0.68
Z = x-17555
0.68 = x-17555
X = x-17555
X = 212.4 or 212 units
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