Suppose the MWTP in periods 1 (now) and 2 (one year from now) is given by P = 8 - 0.4q Marginal extraction cost = $2.r = 20%. The available supply is 20 units. Determine the allocation of outputs across the two periods that maximizes the present value of the net benefits for the use of the resources. Draw your answer on a graph similar to Figure 5.2 in the text, using engineering graph paper with fine detail (small squares) on the back of this sheet.

Suppose the MWTP in periods 1 (now) and 2 (one year from now) is given by P = 8 - 0.4q Marginal extraction cost = $2.r = 20%. The available supply is 20 units. Determine the allocation of outputs across the two periods that maximizes the present value of the net benefits for the use of the resources. Draw your answer on a graph similar to Figure 5.2 in the text, using engineering graph paper with fine detail (small squares) on the back of this sheet.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 4E: Using the data in E4-2 and spreadsheet software, determine: The variable cost per unit, the total...

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