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alex41 [277]
3 years ago
12

Management at Gordon Electronics is considering adopting a bonus system to increase production. One suggestion is to pay a bonus

on the highest 5% of production based on past experience. Past records indicate weekly production follows the normal distribution. The mean of this distribution is 4,000 units per week and the standard deviation is 60 units per week. If the bonus is paid on the upper 5% of production, the bonus will be paid on how many units or more?
Business
1 answer:
tekilochka [14]3 years ago
3 0

Answer:

  • <u><em>4,099 units or more</em></u>

Explanation:

The cumulative distribution of a random variable X that follows a normal distribution is given by the area undear the "bell curve" and the values are given by the corresponding table for the standard normal distribution.

The standardized value of the variable X is called Z and is calculated with the formula:

          Z=\dfrac{X-\mu}{\sigma}

Where:

         \mu=mean=4,000

         \sigma=standard\text{ }deviation=60

You read the Z-value for which the probability is greater than or equal to 5% in the table for the values of the area to the right of Z. Using probability = area under the curve ≥ 5%, the Z-value is 1.645 (interpolating between p = 0.0495, Z = 1.64 and p = 0.0505, Z = 1.65).

Substituting in the formula for Z:

  • 1.645 = (X - 4,000) / 60

  • X= 60 × 1.645 + 4,000 = 4,098.7 ≈ 4,099

Hence, the bonus will be paid on 4,099 units or more.

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Your​ company, which has a MARR of​ 12%, is considering the following two investment​ alternatives:
mote1985 [20]

Answer:

future worth:

project A  11,615.26

project B  12,139.18‬

It should choose project B as their future value is greater

IRR of project A: 13.54%

We should remember that the IRR is the rate at which the net value is zero thus, equals the inflow with the cash outlay

It is calculate with excel or financial calculator due to the complex of the formula.

Explanation:

Project A

We calculate the future value of the cash flow per year and cost as we are asked for future value. The salvage value is already at the end of the project life so we don't adjust it.

Revenues future value

C \times \frac{(1+r)^{time} -1}{rate} = FV\\  

C 15,000

time 8

rate 0.12

15000 \times \frac{(1+0.12)^{8} -1}{0.12} = FV\\  

FV $184,495.3970  

Expenses future value

C \times \frac{(1+r)^{time} -1}{rate} = FV\\

C 3,000

time 10

rate 0.12

3000 \times \frac{(1+0.12)^{10} -1}{0.12} = FV\\  

FV $52,646.2052  

Cost future value

Principal \: (1+ r)^{time} = Amount  

Principal 40,000.00

time 10.00

rate 0.12000

40000 \: (1+ 0.12)^{10} = Amount  

Amount 124,233.93

Net future worth:

-124,233.93 cost - 52,646.21 expenses + 184,495.40 revenues + 4,000 salvage value

future worth 11,615.26

Project B

cost:

Principal \: (1+ r)^{time} = Amount  

Principal 60,000.00

time 10.00

rate 0.12000

60000 \: (1+ 0.12)^{10} = Amount  

Amount 186,350.89

expenses 52,646.21 (same as previous)

revenues

C \times \frac{(1+r)^{time} }{rate} = FV\\  

C 24,000

time 7

rate 0.12

24000 \times \frac{(1+0.12)^{7} -1}{0.12} = FV\\  

FV $242,136.2815  

TOTAL

242,136.28 + 9,000 - 52,646.21 - 186,350.89 = 12,139.18‬

Internal rate of return of project A

we write the time and cash flow for each period.

Time Cash flow

0 -40,000

1 -3,000

2 -3,000

3 12,000

4 12,000

5 12,000

6 12,000

7 12,000

8 12,000

9 12,000

10 16,000

IRR 13.54%

Then we write on excel the function =IRR(select the cashflow)

and we got the IRR of the project

6 0
3 years ago
When a business is calculating its operating costs, it must include _____. answer.com?
Svetach [21]
Variable costs.


Hope that helps, Good luck! (:
6 0
3 years ago
Read 2 more answers
Which of the following is NOT correct about causal regression analysis of the form Y = f(X)? A. Selection of the appropriate cau
Law Incorporation [45]

Answer:

A. Selection of the appropriate causal variable Y is important

Explanation:

We have this function, Y = f(X).

From this function we can see that Y is dependent on X. That is, it is a function of X. Y is not a causal variable. A causal variable is a variable that is able to influence the variable of interest. From this question Y is the variable of interest. It is the dependent variable. The independent variable is X and it is the causal variable.

Therefore the incorrect one is Selection of the appropriate causal variable Y is important

5 0
3 years ago
CamScan is a manufacturer of printers, scanners, and other office equipment. It announces a cash refund for corporate purchases
Naddik [55]

Answer:

rebate

Explanation:

Rebates are used in marketing as discounts for qualifying customers. Instead of offering a general broad discount to every customer, when companies use rebates they can decide what type of customers will receive them. Even some customers that could qualify for the rebate wouldn't get it, since they need to send a form provided by the company and not everyone will be willing to do it.

5 0
3 years ago
A person has $120 to spend on two goods (x and y) whose respective prices are $3 and $5 per unit. (a) Draw the budget line showi
stepan [7]

Answer:

Price of good x is $3

Price of good y is $4

8 0
2 years ago
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