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Alex_Xolod [135]
3 years ago
5

Some students want to start a business that cleans and polishes cars. It takes 1.5 hours of labor and costs $2.25 in supplies to

clean a car. It takes 2 hours of labor and costs $1.50 in supplies to polish a car. The students can work a total of 120 hours in one week. They also decide that they want to spend no more than $135 per week on supplies. The students expect to make a profit of $7.75 for each car that they clean and a profit of $8.50 for each car that they polish. What is the maximum profits the students can make
Business
1 answer:
Mekhanik [1.2K]3 years ago
3 0

Answer:

Answer is explained in the explanation section below.

Explanation:

Solution:

Let the variable x denotes the labor time to clean and polish the car.

Let the variable y denotes the costs to clean and polish the car.

So,

Constraints Are:

1.5x + 2y \leq 120

2.25x + 1.50y \leq 135

Hence,

The objective function becomes:

Function for the maximum profits students can make is

Max Z = $7.75x + $8.50y

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Answer:

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Explanation:

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Here, Y-X = Z-Y =$11.70

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<u>iii) When the price is between Y and Z , only call with strike X and Y are executed.</u>

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the minimum payoff occurs when P=Z

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<u>iv) When the price at maturity is more than Z , all calls are executed</u>

hence, payoff = -1.64 +(P-X) -2* (P-Y) + (P-Z) = -1.64+(2Y-X-Z)

=  -1.64+(Y-X -(Z-Y)) = -1.64+(11.7 - 11.70)

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considering the  four options  traded the maximum payoff = $10.06

<em>Finally determine the maximum net gain when 400 options are traded</em>

<em>= 10.06 * 400 / 4 </em>

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Answer:

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2) No Entry

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