You own a shop and you produce widgets that require the use of two raw components: steel
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Question:
You own a shop and you produce widgets that require the use of two raw components: steel and copper. The unit price of a widget is 10 USD. You bought 10,000 Kg of copper at a price per kilo of 9.76 USD, and 5,000 kg of steel at 0.55 USD per kilo. With these raw materials you can immediately produce at no additional cost 9,900 widgets. The value of the building where your shop is situated is 75,000 USD. Assume you did not undertake any debt to finance your shop. If you want to sell the shop before starting the widgets' production, what is the minimum price you would accept if your opportunity cost of capital is 0%?
Related Book For
Introduction to Operations Research
ISBN: 978-1259162985
10th edition
Authors: Frederick S. Hillier, Gerald J. Lieberman
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