Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 13, Problem 6P
To determine
The
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A company produces and sells luxury goods and is able to control the demand for the product by varying the selling price.
The relationship between price and demand is found to be:
p=10-(42/D^2)+2Dwhere p is the price per unit in million dollars and D is the demand per year. The company is seeking to maximize its profit. The fixed cost is $59 million per year and the variable cost is $25 million per unit. The production capacity is 42 units per year, and the company produces at least 1 unit per month.
1) What is the company’s range of profitable output per year?
The expression “6/10, net 45” means that the customers receive a 6% discount if they pay within 10 days; otherwise, they must pay in full within 45 days. What would the seller's cost of capital have to be in order for the discount to be cost justified?
66.5714%
62.5714%
65.5714%
61.5714%
What is the overall rate of return on a $100,000 investment that returns 20% on the first $30,000 and 14% on the remaining $70,000?
Enter the letter that best corresponds to the correct answer.
0.15 8%
18.20 %
15.5 8%
d 17% (average)
Chapter 13 Solutions
Engineering Economy (17th Edition)
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