Florentino Allers is the production manager of Electronics Manufacturer. Due to limited capacity, the company can only produce one of two possible products: An industrial motherboard with a 75% probability of making a profit of $1 million and a 25% probability of making a profit of $150,000 A regular motherboard with a 100% chance of making a profit of $710,000 Florentino will get a 20% bonus from his department. Florentino has the responsibility to choose between the two products and is more of a risk-taker, more so than most of the top management at Electronics Manufacturer. Which option is Florentino more likely to choose and why? Which option would the company be more likely to choose and why? What changes should the company make to Florentino’s compensation to avoid unnecessary risks

Artisan Metalworks has a bottleneck in their production that occurs within the engraving department. Jamal Moore, the COO, is considering hiring an extra worker, whose salary will be $54,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,000 more units per year. Currently, the selling price per unit is $25.00 and the cost per unit is $7.80. Direct materials $3.50 Direct labor 1.10 Variable overhead 0.40 Fixed overhead (primarily depreciation of equipment) 2.80 Total $7.80 Using the information provided, calculate the annual financial impact of hiring the extra worker. Profit $_____ ______

Florentino Allers is the production manager of Electronics Manufacturer. Due to limited capacity, the company can only produce one of two possible products: An industrial motherboard with a 70% probability of making a profit of $1 million and a 30% probability of making a profit of $180,000. A regular motherboard with a 100% chance of making a profit of $700,000. Florentino will get a 20% bonus from his department. Florentino has the responsibility to choose between the two products and is more of a risk-taker, more so than most of the top management at Electronics Manufacturer. A. Which option is Florentino more likely to choose and why? Florentino will choose the industrial motherboard since he is a risk-taker, and a 70% chance of a $1 million profit is much higher than  the $fill in the blank 2 (even though there is a 30% chance of a $180,000 profit with the industrial motherboard). B. Which option would the company be more likely to choose and why? The company, being a lower risk…

Florentino Allers is the production manager of Electronics Manufacturer. Due to limited capacity, the company can only produce one of two possible products: An industrial motherboard with a 75% probability of making a profit of $1 million and a 25% probability of making a profit of $190,000. A regular motherboard with a 100% chance of making a profit of $710,000.Florentino will get a 20% bonus from his department. Florentino has the responsibility to choose between the two products and is more of a risk-taker, more so than most of the top management at Electronics Manufacturer. A. Which option is Florentino more likely to choose and why? Florentino will choose the industrial motherboard since he is a risk-taker, and a 75% chance of a $1 million profit is much     the $fill in the blank 2 (even though there is a 25% chance of a $190,000 profit with the industrial motherboard). B. Which option would the company be more likely to choose and why? The company, being a     taker than…

1. Eddie is a production engineer for a major supplier of component parts for cars. He has determined that a robot can be installed on the production line to replace one employee. The employee earns $20 per hour and benefits worth $8 per hour for a total annual cost of $58,240 this year. Eddie estimates this cost will increase 6% each year. The robot will cost $16,500 to operate for the first year with costs increasing by $1500 each year. The firm uses an interest rate of 15% and a 10- year planning horizon. The robot costs $75,000 installed and will have a salvage value of $5000 after 10 years. Should Eddie recommend that purchase of the robot?