2017//1(c)//Engineering Eco//KU

A plant operation has fixed cost of $2,000,000 per year, and its output capacity is 100,000 electrical appliances per year. The variable cost is $40 per unit, and the product sells for $90 per unit.

i. Construct the economic breakeven chart and determine the breakeven quantity and dollar

breakeven point.

ii. Compare annual profit when the plant is operating at 100% capacity. Assume that the first 90% of capacity output is sold at $90 per unit and that the remaining 10% of production is sold at $70 per unit

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2017//2(b)//Engineering Eco//KU

A loan of $10,000 is to be repaid over a period of eight years. During the first four years, exactly half of the loan principal is to be repaid (along with accumulated compound interest) by a uniform series of payments of A1 dollar per year. The other half of the loan principal is to be repaid over four years, with accumulated interest, by a uniform series of payments of A2 dollar per year, If i=9% per year, what are A1 and A2?

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