1. Demand for a company product is, Q=400 - 0.5P and TC =2-,000 +50Q + 3Q^2 Tota
ID: 1100883 • Letter: 1
Question
1. Demand for a company product is,
Q=400 - 0.5P and TC =2-,000 +50Q + 3Q^2
Total profit is maximized at output of; (Points : 1)
a) 750
b) 625
c) 850
d) 75
E) none of the above
2. What is the profit maximizing price? (Points : 1)
a) 810
b) 750
c) 650
d) 600
e) none of the above
3. What will profits be at the profit max output and price; (Points : 1)
a) 8000
b) 8100
c) 9050
d) 8125
e) none of the above
4. A company sells a product to retail and commercial customers. The inverse demand functions for these markets are;
Retail: P1 = 180 - 8Q1 P2 = 100 - 4Q2
Total cost for the company is: TC=5- + 20 (q1 + Q2)
Assuming the company can charge different prices in each market, the company`s total profit will be; (Points : 1)
a) 11,500
b) 5,600
c) 1,225
d) 1,150
e) none of the above
5. A company is considering the purchase of a new machine which will cost $100,000. Net cash flow before depreciation and taxes are $25,000 per year for five years. The machine would be depreciated (straight-line method) over five years with no salvage value.
What is the annual net cash flow after depreciation and taxes? (Points : 1)
a) 25,000
b) 21,000
c) 28,000
d) 23,000
e) none of the above
6. What is the internal rate of return (Points : 1)
a) 8. 25%
b) 4. 85%
c) 3. 80%
d) 6. 20%
e) none of the above
Explanation / Answer
75
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