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Anon25 [30]
3 years ago
14

In order to package one of their products, Acme Box Co. needs to construct a box whose bottom side has length 3 times its width.

The material used to build the top and bottom of the box cost $10 per square foot, while the material used to build the four sides of the box cost $6 per square foot. The box must have a volume of 50 cubic feet. (a) In terms of the length ` of the bottom, the width w of the bottom and the height h of the box (all measured in feet), write a formula for the cost C (in dollars) to construct a box of length `, width w and height h. (b) Given the other conditions specified in the problem, express C as a function of a single variable. (c) Determine the dimensions of the box that minimize the cost. Be sure to justify that you have found dimensions that produce the minimum cost. (You’ll be fired if you submit the maximum cost to your boss!) To the nearest dollar, how much will it cost to build the box at these dimensions?
Business
1 answer:
Len [333]3 years ago
7 0

Answer:

(a)Total Cost, C=20LW+12LH+12WH

(b)C(W)=\dfrac{60W^3+800}{W}

(c)W=1.88ft, L=5.64 ft and H=4.72 ft.

Minimum \:cost, C\approx \$638 $  (to the nearest dollar)$

Explanation:

Given the dimensions of the box to be L,W and H.

(a)

  • The material for the top and bottom of the box cost $10 per square foot
  • The material used to build the four sides of the box cost $6 per square foot.
  • Area of Top and Bottom=2LW
  • Cost of Top and bottom=$10 X 2LW=20LW
  • Area of four Sides =2(LH+WH)
  • Cost of Four Sides =$6*2(LH+WH)=12(LH+WH)
  • Total Cost, C=20LW+12LH+12WH

(b)The bottom side has length 3 times its width.

L=3W

Volume of the box=50 cubic feet.

Volume,V=LWH=3W^2H

3W^2H=50\\H=\dfrac{50}{3W^2}

Substituting L=3W and H=\dfrac{50}{3W^2} into the cost function C.

C=20LW+12LH+12WH

C=20LW+12LH+12WH\\=20*3W*W+12*3W*\dfrac{50}{3W^2}+12W*\dfrac{50}{3W^2}\\=60W^2+\dfrac{600}{W}+\dfrac{200}{W}\\=\dfrac{60W^3+600+200}{W}\\C(W)=\dfrac{60W^3+800}{W}

(c)The minimum cost occurs at the point where the derivative of the cost function equals zero.

If\:C(W)=\dfrac{60W^3+800}{W}\\C'(W)=\dfrac{120W^3-800}{W^2}=0\\120W^3-800=0\\120W^3=800\\W^3=\frac{800}{120}\\ W=1.88

Recall:

L=3W=5.64 feet\\H=\dfrac{50}{3W^2}=\dfrac{50}{3(1.88)^2}=4.72 ft

The dimensions of the box that minimize the cost are W=1.88ft, L=5.64 ft and H=4.72 ft.

Cost of the box at these dimension

C(W)=\dfrac{60W^3+800}{W}\\C(1.88)=\dfrac{60(1.88)^3+800}{1.88}\approx \$638 $  (to the nearest dollar)$

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siniylev [52]

Answer:

a. The expected return on the equally weighted portfolio of the three stocks is 16.23%.

b. The variance of the portfolio is 0.020353.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question. See the attached pdf file for the complete question.

a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

This can be calculated using the following 2 steps:

Step 1: Calculation of expected returns under each state of the economy

Expected return under a state of the economy is the sum of the multiplication of the percentage invested in each stock and the rate of return of each stock under the state of the economy.

This can be calculated using the following formula:

Expected return under a state of the economy = (Percentage invested in Stock A * Return of Stock A under the state of the economy) + (Percentage invested in Stock B * Return of Stock B under the state of the economy) + (Percentage invested in Stock C * Return of Stock C under the state of the economy) …………… (1)

Since we have an equally weighted portfolio, this implies that percentage invested on each stock can be calculated as follows:

Percentage invested on each stock = 100% / 3 = 33.3333333333333%, or 0.333333333333333

Substituting the relevant values into equation (1), we have:

Expected return under Boom = (0.333333333333333 * 0.09) + (0.333333333333333 * 0.03) + (0.333333333333333 * 0.39) = 0.17

Expected return under Bust = (0.333333333333333 * 0.28) + (0.333333333333333 * 0.34) + (0.333333333333333 * (-0.19)) = 0.143333333333333

Step 2: Calculation of expected return of the portfolio

This can be calculated using the following formula:

Portfolio expected return = (Probability of Boom Occurring * Expected Return under Boom) + (Probability of Bust Occurring * Expected Return under Bust) …………………. (2)

Substituting the relevant values into equation (2), we have::

Portfolio expected return = (0.71 * 0.17) + (0.29 * 0.143333333333333) = 0.162266666666667, or 16.2266666666667%

Rounding to 2 decimal places as required by the question, we have:

Portfolio expected return = 16.23%

Therefore, the expected return on the equally weighted portfolio of the three stocks is 16.23%.

b. What is the variance of a portfolio invested 16 percent each in A and B and 68 percent in C? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., .161616.)

This can be calculated using the following 3 steps:

Step 1: Calculation of expected returns under each state of the economy

Using equation (1) in part a above, we have:

Expected return under Boom = (16% * 0.09) + (16% * 0.03) + (68% * 0.39) = 0.2844

Expected return under Boom = (16% * 0.28) + (16% * 0.34) + (68% * (-0.19)) = -0.03

Step 2: Calculation of expected return of the portfolio

Using equation (2) in part a above, we have:

Portfolio expected return = (0.71 * 0.2844) + (0.29 *(-0.03)) = 0.193224

Step 3: Calculation of the variance of the portfolio

Variance of the portfolio = (Probability of Boom Occurring * (Expected Return under Boom - Portfolio expected return)^2) + (Probability of Bust Occurring * (Expected Return under Bust - Portfolio expected return)^2) …………………….. (3)

Substituting the relevant values into equation (3), we have:

Variance of the portfolio = (0.71 * (0.2844 - 0.193224)^2) + (0.29 * (-0.03- 0.193224)^2) = 0.020352671424

Rounding to 6 decimal places as required by the question, we have:

Variance of the portfolio = 0.020353

Therefore, the variance of the portfolio is 0.020353.

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