Notes:

For each question, you need to interpret the results from each analysis to help a manager make proper decisions.

Part 1: Corporation X, which manufactures laptops, would like to understand how many laptops it needs to produce within the next month. This company produces three types of laptops: Y-1, Y- 2, and Y-3. Y-1 needs 150 days of labor and $5,000 raw materials, while Y-2 needs 400 days of labor and $12,000 raw materials, and Y-3 needs 350 days of labor and $8,000 raw materials. The plant has a capacity of 300,000 working days per month, and it has a $10 million material budget per month. While the profit contribution of Y-1 is $5,000, Y-2 is $15,000, and Y-3 is $10,000. The company needs to produce at least 200 units of Y1, at least 100 units of Y2, and at most 300 units of Y3 each month. The main issue is to maximize the company's profits by identifying how many units of each laptop type should be produced each month. Present this information on a worksheet titled "Question 1" showing your findings. Include your interpretation of the results to senior management in the report document.

Use Solver and answer the following questions:

1. How many Y-1, Y-2, and Y-3 should the company produce to maximize the profit? 2. Interpret the results you get from the Solver in a short paragraph. (e.g., you can mention which Laptop type is (not) profitable and why).

Part 2: Company X wants to understand its cash flow for 2019 and 2020. The initial sales in 2019 is 170, and the sales growth rate is 6% per month. Correspondingly, the unit cost per item is 0.9 (i.e., one item costs 0.9 units, two items cost 1.8 units, and so forth), and the unit revenue is 1.7. Consider fixed cost equal to 250.

• In Excel, present this information on a worksheet titled "Question 2".

• Using an appropriate data table, calculate Sales, Revenue, Variable Cost, and Net Profit

  for each month for both 2019 and 2020 (24 months).

• Draw a line chart including sales, revenue, variable cost, and net profit. State your findings

  and then provide recommendations to the management.

  Part 3: Project X requires an initial investment of $35,000 and is expected to generate revenues of $15,000, $23,000 and $29,000 for the first, second and third years, respectively.

  • Compute the net present value (NPV) for this investment using an annual interest rate of 5 percent and interpret the result.

  • Find an annual interest rate, which yields a net present value of $10,000 after three years for the project.

  • Calculate the Internal Rate of Return of the project and explain IRR value.

    Note: Use goal-seeking analysis and present this information on a worksheet titled "Question 3" with a table showing your findings.