Answer:
Explanation:
The main goal is to compare these two based on the same terms; present values. Find the present value of $500 today by discounting it using 10% interest rate over two years.
PV = FV/ (1+r)^n
where FV = Future value = $500
r = discount rate = 10% or 0.10 as a decimal
n = total duration of investment = 2
PV = $500/(1+0.10)^2
PV = $500/1.21
PV = $413.22
Since you are basing the decision on what you would rather pay, you would want a lower pay amount. The $425 is already in its present value terms and it is more expensive. Therefore, you would prefer to pay $500 in two years.
Answer:
The answer is: B) Charles is starting from almost scratch developing a prospect and customer base and may lose some current customers because he does not know about them.
Explanation:
Obviously Charles doesn't know the customers the old sales representative had and three weeks may not be enough time for Charles to get to know them and gather enough information about them either.
So basically, Charles is starting from scratch and needs to develop his own customer database. Doing so will consume time and effort, and possibly Charles will lose some sales because of this. Eventually he will need to catch up and probably match and even exceed the previous salesman's sales records.
Answer:
a lot is missing in this question, so I looked for a similar one:
Howie buys prefabricated fiberglass hot tub shells from a local supplier and adds the pump and tubing to the shells to create his hot tubs. (This supplier has the capacity to deliver as many hot tub shells as Howie needs.) Howie installs the same type of pump into both hot tubs.
He will have only 200 pumps available during his next production cycle. From a manufacturing standpoint, the main difference between the two models of hot tubs is the amount of tubing and labor required. Each Aqua-Spa requires 9 hours of labor and 12 feet of tubing. Each Hydro-Lux requires 6 hours of labor and 16 feet of tubing. Howie expects to have 1,520 production labor hours and 2,650 feet of tubing available during the next production cycle.
Howie earns a profit of $350 on each Aqua-Spa he sells and $300 on each Hydro-Lux he sells.
you have to maximize the following equation: 350A + 300H
where:
A = number of Aqua-Spa hot tubs sold
H = number of Hydro-Lux hot tubs sold
the constraints are:
A + H ≤ 200
9A + 6H ≤ 1,520
12A + 16H ≤ 2,650
A ≥ 0
B ≥ 0
both A and B are integers
Using solver, the optimal solution is: 117A + 77B, and the maximum profit = $64,050
