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expeople1 [14]
3 years ago
6

Two mining fields, Field A and Field B, of a coal mining company produce Lignite and Bituminous coal. The operating cost per day

for Field A and Field B are $55,000 and $45,000, respectively. The recent records at the company indicate that Field A can produce 250 tons of Lignite along with 300 tons of Bituminous coal per day, whereas Field B can produce 200 tons of Lignite along with 450 tons of Bituminous coal per day. The expected demands to be met are 120,000 tons of Lignite and 170,000 tons of Bituminous coal. Leadership wants to minimize the operating costs of the mining fields. Assuming A and B represent number of days Field A and Field B operates respectively. Which equation indicates constraint on the capacity of the Bituminous coal?

Business
1 answer:
Ivan3 years ago
4 0

Answer:

Explanation:

Base on the scenario been described in the question, solver tool has been used in the spreadsheet below to solve a linear programming problem with a minimization objective function and all constraints.

We can locate an attached file below.

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Respond to the following comments:
MakcuM [25]

Answer:

Comment for statement A -  The firm must still compare the IRR with the opportunity cost of capital when using the IRR rule. Therefore, even with the IRR method, the   appropriate discount rate must still be specified.

Comment for statement B - There should be a higher discount rate on risky cash flows than the rate used to discount less risky cash flows.

Making use of the payback rule is equivalent to using the NPV rule with a zero discount rate for cash flows before the payback period and an infinite discount rate for cash flows thereafter.

Explanation:

a)

“I like the IRR rule. I can use it to rank projects without having to specify a discount rate”

The firm must still compare the IRR with the opportunity cost of capital when using the IRR rule. Therefore, even with the IRR method, the   appropriate discount rate must still be specified.

b.

“I like the payback rule. As long as the minimum payback period is short, the rule makes sure that the company takes no borderline projects. That reduces risk”

There should be a higher discount rate on risky cash flows than the rate used to discount less risky cash flows.

Making use of the payback rule is equivalent to using the NPV rule with a zero discount rate for cash flows before the payback period and an infinite discount rate for cash flows thereafter.

5 0
3 years ago
If you were to design a range of athletic shoes for various sports activities, what key factors would you consider during the de
vichka [17]

Answer:

Key factors:

Customers

Quality of shoes

Brand (trained with a pro before or used by a pro)

modeling expenses

Explanation:

8 0
3 years ago
Camp Elim obtains a $125,000, 6%, five-year installment note for a new camp bus on January 1, 2021. The note requires monthly in
kirza4 [7]

Answer:

Option (B) is correct.

Explanation:

The Journal entry is as follows:

Interest expense A/c Dr. $625

Note payable A/c       Dr. $1791.60

To cash                                            $$2,416.60

(To record the first month’s payment on January 31, 2021)

Working notes:

Monthly interest expense:

= (Note payable × Interest rate per annum) ÷ 12 months

= ($125,000 × 6%) ÷ 12 months

= $625

Note payable = $2,416.60 - $625

                       = $1,791.60

5 0
3 years ago
Cody Mountain Sports is an outdoor sporting goods guiding service located in northern Wyoming. Cody Mountain Sports (CMS) primar
saveliy_v [14]

Answer:

Cody Mountain Sports (CMS)

T-accounts:

Cash

Date       Account Titles               Debit    Credit

Mar. 1     Common Stock       $100,000

Mar. 1     Prepaid Insurance                     $1,200

Mar. 4    Service Revenue       20,000

Mar. 19  Vehicle Expenses                       1,000

Mar. 22 Accounts Receivable  3,000

Mar. 24 Rent Expense                            4,000

Mar. 27 Salaries Payable                         1,000

Mar. 31 Cash dividends                          2,500

Accounts Receivable

Date       Account Titles               Debit    Credit

Mar. 15   Service Revenue       $3,000

Mar. 22  Cash                                          $3,000

Prepaid Insurance

Date       Account Titles               Debit    Credit

Mar. 1     Cash                             $1,200

Salaries Payable

Date       Account Titles               Debit    Credit

Mar. 18   Salaries Expense                     $10,000

Mar. 27  Cash                             $1,000

Common Stock

Date       Account Titles               Debit    Credit

Mar. 1     Cash                                       $100,000

Service Revenue

Date       Account Titles               Debit    Credit

Mar. 4    Cash                                         $20,000

Mar. 15  Accounts Receivable                   3,000

Salaries Expense

Date       Account Titles               Debit    Credit

Mar. 18   Salaries Payable        $10,000

Vehicle Expense

Date       Account Titles               Debit    Credit

Mar. 19   Cash                             $1,000

Rent Expense

Date       Account Titles               Debit    Credit

Mar. 24  Cash                             $4,000

Cash Dividends

Date       Account Titles               Debit    Credit

Mar. 31   Cash                           $2,500

Explanation:

a) Data and Analysis:

Mar. 1 Cash $100,000 Common Stock $100,000

Mar. 1 Prepaid Insurance $1,200 Cash $1,200

Mar. 4 Cash $20,000 Service Revenue $20,000

Mar. 15 Accounts Receivable $3,000 Service Revenue $3,000

Mar. 18 Salaries Expense $10,000 Salaries Payable $10,000

Mar. 19 Vehicle Expenses $1,000 Cash $1,000

Mar. 22 Cash $3,000 Accounts Receivable $3,000

Mar. 24 Rent Expense $4,000 Cash $4,000

Mar. 27 Salaries Payable $1,000 Cash $1,000

Mar. 31 Cash dividends $2,500 Cash $2,500

6 0
3 years ago
Payback Period Payson Manufacturing is considering an investment in a new automated manufacturing system. The new system require
MrRissso [65]

Answer:

a. 4 years

b. 5 years

Explanation:

The payback period is the time taken for the cash inflows from an investment to equal to the initial cash outflow or amount invested. To get this, the cash inflow are deducted from the outflows until the net is zero.

Considering both expected cash flows (all amounts in $);

Period    Initial out flow   Inflow         Balance         Inflow         Balance

Year 0    (1,200,000)              0          (1,200,000)       0            (1,200,000)      

Year 1                             300,000       (900,000)    150,000     (1,050,000)

Year 2                            300,000       (600,000)    150,000     (1,050,000)

Year 3                            300,000       (300,000)    400,000     (1,050,000)  

Year 4                            300,000               0           400,000     (1,050,000)  

Year 5                                                                        100,000     (1,050,000)

From the table above, with an inflow of $300,000 yearly, the inflows would equal the total outflow in 4 years while the annual cash flows: $150,000, $150,000, $400,000, $400,000, and $100,000 would make the inflows equal to the outflows in 5 years.

3 0
3 years ago
Read 2 more answers
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