You are the CFO of chair manufacturing Company The Blue Chair. The total cost (in dollars)...
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You are the CFO of chair manufacturing Company "The Blue Chair". The total cost (in dollars) of manufacturing x chairs is given by: C(x) = 0.05x? – 50x + 15000 The total revenue (in dollars) of those x chairs is given by: R(x) = -0.04x? + 48x The above information has been put together by your research team. You are responsible for determining next week's production cycle. To aid your decision please do the following: (a) Determine the cost and revenue of creating i) 100 chairs, i) 300 chairs, i) 600 chairs, w) 1100 chairs. (b) Find the marginal cost and marginal revenue functions. (c) Find the marginal cost and revenue when creatingi) 100 chairs, i) 300 chairs, ii) 00 chairs, iv) 1100 chairs. (d) Looking only at cost which level seems to be the best production level (from choices above). (e) Looking only at revenue which level seems to be the best production level (from the choices above). (f) What is the optimum production cost level? (When does the marginal cost function say we should stop production?) (8) What is the optimum production revenue level? (When does the marginal revenue function say we should stop production?) (h) Graph the two functions (total cost and total revenue, you may use a graphing utility like GeoGebra 5) on a single graph. Point out the optimum cost level and the optimum revenue level. 6) Create a profit function P(x) based on the information given. G) Find the profit when creating i) 100 chairs, i) 300 chairs, i) 600 chairs, iv) 1100 chairs. (k) Find the marginal profit function. (1) Find the marginal profit at i) 100 chairs, i) 300 chairs, ii) 600 chairs, iv) 1100 chairs. (m) Add the graph of the profit function to the other two graphs. (They should all be on the same axis). (n) What is the optimum profit level? (0) What is the optimum profit? You are the CFO of chair manufacturing Company "The Blue Chair". The total cost (in dollars) of manufacturing x chairs is given by: C(x) = 0.05x? – 50x + 15000 The total revenue (in dollars) of those x chairs is given by: R(x) = -0.04x? + 48x The above information has been put together by your research team. You are responsible for determining next week's production cycle. To aid your decision please do the following: (a) Determine the cost and revenue of creating i) 100 chairs, i) 300 chairs, i) 600 chairs, w) 1100 chairs. (b) Find the marginal cost and marginal revenue functions. (c) Find the marginal cost and revenue when creatingi) 100 chairs, i) 300 chairs, ii) 00 chairs, iv) 1100 chairs. (d) Looking only at cost which level seems to be the best production level (from choices above). (e) Looking only at revenue which level seems to be the best production level (from the choices above). (f) What is the optimum production cost level? (When does the marginal cost function say we should stop production?) (8) What is the optimum production revenue level? (When does the marginal revenue function say we should stop production?) (h) Graph the two functions (total cost and total revenue, you may use a graphing utility like GeoGebra 5) on a single graph. Point out the optimum cost level and the optimum revenue level. 6) Create a profit function P(x) based on the information given. G) Find the profit when creating i) 100 chairs, i) 300 chairs, i) 600 chairs, iv) 1100 chairs. (k) Find the marginal profit function. (1) Find the marginal profit at i) 100 chairs, i) 300 chairs, ii) 600 chairs, iv) 1100 chairs. (m) Add the graph of the profit function to the other two graphs. (They should all be on the same axis). (n) What is the optimum profit level? (0) What is the optimum profit?
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Related Book For
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
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