Siobhan Roy has a$100,000 ring and keeps$100,000 cash in a checking account that paysno interest. If the ring is stolen, Siobhan will be forced to replace it at a cost of$100,000. Thechance of this happening is 1/100. She can, however, get insurance that would completelyreimburse to her the$100,000 if her ring was stolen.
What is the largest premium she would be willing to pay and what's the certainty equiv- alent of the event if her U-function is:
(i) U = y1/4
(ii) U = y*
(iii) U = Y?
where Y denotes the amount of cash she has. (Note that her utility function does not include the value of the ring, since she always has the ring.)
Answers
Answer:
i) $4048.74
ii) $250.94
iii) $1000
Explanation:
cost of ring = $100,000
P( stolen ring ) = 1/100 = 0.01
i) U = y^1/4
expected utility without insurance
Eu = 100,000^1/4 ( 0.99) + 0^1/4 ( 0.01 ) = 17.60
∴ largest premium equivalent utility = ( 17.60 )^4 = $95951.26
Largest premium = 100,000 - 95,951.26 = $4048.74
ii) U = y4
attached below
iii) U = Y
attached below
Related Questions
Which is the best measure of risk for a single asset held in isolation (Stand Alone Investment), and which is the best measure for an asset held in a diversified portfolio
Answers
Answer:
Single asset = Coefficient of VariationPortfolio = BetaExplanation:
When dealing with standalone risk, coefficient of variation is best because it shows the amount by which the asset's returns might deviate from the average returns of the market.
As for portfolio assets that are well diversified, the best measure would be beta because diversified portfolios deal with systematic risk and beta shows the movement of the portfolio in relation to the market and so will show that systematic risk.
A farmer is considering the installation of a fuel storage system that will save $0.065 per gallon because the fuel can be purchased in bulk. The farmer uses about 20,000 gallons per year. The system will cost $10,000 to install. The annual operating and maintenance cost will be nothing in the first year but will increase by $25 each year thereafter. After ten years that the system will be used it will have a salvage value of $3,000. The Farmer
The farmer's cost of funds is 12%. What is the equivalent uniform annual benefit for the fuel storage system?Based on this analysis, should the farmer purchase the fuel storage?
Answers
Answer:
yes and because yes
Explanation:
Furniture, Inc., estimates the following number of mattress sales for the first four months of 2019: Month Sales January 29,000 February 40,800 March 34,600 April 36,200 Finished goods inventory at the end of December is 7,000 units. Target ending finished goods inventory is 20% of the next month's sales. How many mattresses need to be produced in January 2019?
Select one:
a. 27,800 mattresses
b. 41,800 mattresses
c. 30,160 mattresses
d. 44,160 mattresses
Answers
Answer:
c. 30,160 mattresses
Explanation:
At the beginning of January, we had 7,000 units as opening stock inventory( which was the ending inventory in December), which means out of the planned sales in January 7,000 units are already available
The balance of January sales to be produced in January is the excess of planned sales of 29,000 units over the beginning inventory of 9,000 units
January sales items to be produced in January=29000-7000
January sales items to be produced in January=22,000
Also, we need to produce 20% of February sales in January which would serve as the closing inventory
total production in January=22,000+(40,800*20%)
total production in January=. 30,160 mattresses
Aircard Corporation tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period as if it uses a periodic inventory system. The following are the transactions for the month of July.
Units Unit Cost
July 1 Beginning Inventory 2,700 $47
July 5 Sold 1,350
July 13 Purchased 6,700 51
July 17 Sold 3,700
July 25 Purchased 8,700 57
July 27 Sold 5,700
Required:
Calculate the cost of ending inventory and cost of goods sold assuming a perpetual inventory system is used in combination with (a) FIFO and (b) LIFO.
Answers
Answer:
Aircard Corporation
Perpetual Inventory System
FIFO LIFO
Ending Inventory = $418,950 $387,450
Cost of goods sold = $545,550 $577,050
Explanation:
a) Data and Calculations:
Date Transactions Units Unit Cost Total
July 1 Beginning Inventory 2,700 $47 $126,900
July 5 Sold (1,350)
July 13 Purchased 6,700 51 341,700
July 17 Sold (3,700)
July 25 Purchased 8,700 57 495,900
July 27 Sold (5,700)
July 31 Total available 18,100 $964,500
July 31 Total units sold (10,750)
July 31 Ending Inventory 7,350
FIFO:
Cost of Ending Inventory
Date Transactions Units Unit Cost Total Balance
July 1 Beginning Inventory 2,700 $47 $126,900 $126,900
July 5 Sold (1,350) $63,450
July 13 Purchased 6,700 51 341,700 405,150
July 17 Sold (3,700) 221,850
July 25 Purchased 8,700 57 495,900 717,750
July 27 Sold (5,700) 418,950
Ending Inventory = $418,950
Cost of goods sold = $545,550 ($964,500 -$418,950)
LIFO:
Cost of Ending Inventory
Date Transactions Units Unit Cost Total Balance
July 1 Beginning Inventory 2,700 $47 $126,900 $126,900
July 5 Sold (1,350) $63,450
July 13 Purchased 6,700 51 341,700 405,150
July 17 Sold (3,700) 216,450
July 25 Purchased 8,700 57 495,900 712,350
July 27 Sold (5,700) 387,450
Ending Inventory = $387,450
Cost of goods sold = $577,050 ($964,500 -$387,450)
Mutual fund A earned 10 percent while B earned 8 percent. The standard deviations of the returns were 10 percent and 7 percent, respectively. The risk free rate is 1%. According to the Sharpe ratio, which fund performed better
Answers
Answer:
Explanation:
The Sharpe ratio is given by:
(Return of portfolio - risk free rate) / standard deviation.
Annuity due. Reginald is about to lease an apartment for 12 months. The landlord wants him to make the lease payments at the start of the month. The monthly payments are $1 comma 300 per month. The landlord says he will allow Reg to prepay the rent for the entire lease with a discount. The one-time payment due at the beginning of the lease is $14 comma 778 . What is the implied monthly discount rate for the rent? If Reg is earning 1.5 % on his savings monthly, should he pay by month or make the one-time payment?
Answers
Answer:
a. The implied monthly discount rate for the rent is 0.843% (10.115%/12)
b. He should pay by month because he will earn 1.5% on his savings and pay 0.843% interest monthly.
Explanation:
a) Monthly payments at the start of the month = $1,300
One-time payment at the beginning of the lease = $14,778
Present Value 14778
Residual Value 0
Lease Term 0 years 12 months
Monthly Payment 1300
Result
Interest/Return Rate 10.115%
Total of 12 Monthly Payments $15,600.00
Total Interest $822.00
If Reg is earning 1.5% on his savings monthly, he will earn $21,957:
Annuity factor for 12 months at 1.5% = 16.89
Total of Reg's savings at the end of 12 months = $21,957 ($1,300 * 16.89)
If a manager wanted to be sure that most of her/his employees would not be late, how much time would she/he suggest they allow for the commute if the average speed were 30 miles per hour
Answers
Answer:
13.5 , 15.1
Explanation:
Hypothesis testing is used to identify the mean for number of miles. 95% confidence interval is used with test statistics value. The test stats value is determined to identify the critical region where most of the population lies in. The 95% confidence interval mean is between 13.5 - 15.1
Conduct research and create a 5 paragraph essay that explains how consumers can protect themselves from fraudulent and deceptive practices. Information can include: do not call list, reading the fine print, terms and condition, personal information disclosures.
Answers
Answer: Reading the fine print: the producer would always make available fine print on their products which distinguishes them from other's, the consumer is expected to take note of that.
Explanation:
Fraudulent practise are being on the increase in business now, as many want to imitate firms and make gains out of their products. The following are what consumers can look out for to help them against this fraudulent practise.
1) Do not call list; the producer would make available how they can be reached and would want the consumer to reach them by such ways.
2) Reading the fine print: the producer would always make available fine print on their products which distinguishes them from other's, the consumer is expected to take note of that.
3) Terms and conditions: although this can be imitated but the producer has a unique way they would do theirs which the consumer should be aware of.
4) Personal information disclosures: when considering services, there will be need for releasing personal information, the customer should verify who they release information to.
ales $3,700 Current assets $4,500 Current liabilities $960 Costs 2,400 Fixed assets 5,200 Long-term debt 3,620 Taxable income $1,300 Equity 5,120 Taxes (21%) 273 Total $9,700 Total $9,700 Net income $1,027 Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 60 percent dividend payout ratio. As with every other firm in its industry, next year's sales are projected to increase by exactly 30 percent. What is the external financing needed
Answers
Answer:
$2,088
Explanation:
Calculation to determine the external financing needed
First step is to calculate the Addition to retained earnings
Sales $4,810
($3700*1.30)
Costs $3,120
($2,400*1.30)
Taxable income $1,690
($4,810-$3,120)
Taxes $355
($1,690*21%)
Net income $1,335
($1,690-$355)
Less:Dividends $801
($1,335*60%)
Addition to retained earnings $534
($1,335-$801)
Second step is to calculate the Total assets
Total assets=$9,700*1.30
Total assets=$12,610
Third step is to calculate the Total equity
Total equity =5,120+Addition to retained earnings
Total equity=5,120+$534
Total equity=$5,654
Fourth step is to calculate Current liabilities
Current liabilities =$960*1.30
Current liabilities=$1,248
Fifth step is to calculate the Total liabilities
Total liabilities=Current liabilities+Long term debt
Total liabilities=$1,248+$3,620
Total liabilities=$4,868
Now let determine the External financing needed
Using this formula
External financing needed=Total assets-(Total equity+Total liabilities)
Let plug in the formula
External financing needed=$12,610-($5,654+$4,868)
External financing needed=$12,610-$10,522
External financing needed=$2,088
Therefore the external financing needed is $2,088
1. List names of all employees who are not from Department A00. 2. What is the average of all employee salaries? 3. Which employees earn more than average? 4. List names and salaries of employees earning more than $35,000. 5. Increase Ms. Haas's salary to $500,000 and then list her new monthly salary.
Answers
Please find schedule attached
Answer and Explanation:
1. Names of employees who are not from Department A00 include employees whose work department isn't A00 such as:
Michael Thompson, Sally Kwan, John Geyer, Irvin Stern etc(please refer to attachment)
2. Average of all employees salary = total employees salary /number of employees = $627415/25=$25096.6
3. There are 16 employees earning above the average salary of the employees, such as Christine Haas, Sally Kwan etc
4. There are 6 employees earning above $35000 such as Christine Haas, Michael Thompson, Sally Kwan, John Geyer etc
5. Ms. Haas currently makes $633000 yearly($52750 per month). If she makes $500000 per year then her salary per month will be $500000/12=$41666
Finisher Inc. sells merchandise of $250,000 in 2020 that includes a three-year limited warranty. Warranty costs are estimated to be 1% of sales. The company incurred actual costs of $800 in 2020 related to the warranties. a. Record the warranty accrual at the time of sale in 2020. b. Record the adjustment to the warranty accrual for actual warranty costs in 2020.
Answers
Answer: See explanation
Explanation:
a. Record the warranty accrual at the time of sale in 2020.
Debit Warranty expense = $250,000 × 1% = $2,500
Credit Warranty Liability $2,500
(To record the warranty accrual)
b. Record the adjustment to the warranty accrual for actual warranty costs in 2020.
Debit Warranty Liability $800
Credit Cash and Payables $800
Samantha Rose Inc. made a $25,000 sale on account with the following terms: 1/15, n/30. If the company uses the net method to record sales made on credit, how much should be recorded as revenue
Answers
Answer:
$24,750
Explanation:
The computation of the amount that should be recorded is shown below"
Sales on account = $25,000
Credit term = 1/15, n/30
Sales discount rate = 1%
Now
Sales discount = Sales on account × Sales discount rate
= 25,000 × 1%
= $250
So,
Net sales = Sales- Sales discount
= $25,000 - $250
= $24,750
Suppose net exports and net capital outflow are in equilibrium in a small open economy. If foreign governments adopt expansionary fiscal policy, in the small open economy the real exchange rate ____________ and net exports ____________. g
Answers
Answer:
the small open economy the real exchange rate DEPRECIATES and net exports INCREASE.
Explanation:
If the government adopts an expansionary monetary policy, then the country's currency will depreciate since a higher interest rate will result in a lower value according to the PPP thoery. When a currency depreciates, the exports become cheaper for foreign countries, so they increase. While the imports become more expensive and they decrease.
Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 40 billion bottles of wine were sold every year at a price of $7 per bottle. After the tax, 35 billion bottles of wine are sold every year; consumers pay $9 per bottle, and producers receive $6 per bottle (after paying the tax). The amount of the tax on a bottle of wine isper bottle. Of this amount, the burden that falls on consumers isper bottle, and the burden that falls on producers isper bottle. True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers.
Answers
Answer and Explanation:
The computation is shown below:
The amount of the tax for the wine bottle is
= $9 per bottle - $6 per bottle
= $3 per bottle
Before the tax, the price per bottle is $7 per bottle
The Tax burden on consumers is
= $9 - $7
= $2 per bottle
And, the tax burden on producers is
= $7 per bottle - $6 per bottle
= $1 per bottle
So, the given statement is false as the impact would remain the same whether it is for producer or consumer
discuss the characteristics and importance of factors of production
Answers
Explanation:
The four factors of production are inputs used in various combinations for the production of goods and services to make an economic profit. The factors of production are land, labor, capital, and entrepreneurship.
In order to stay calm in emergency situations, dispatchers and EMT's set aside their emotions during a crisis. After the crisis has concluded, the employee often talks about the situation to let out the emotions withheld previously. Which emotion regulation does this best describe
Answers
Answer:
Cognitive reappraisal
Explanation:
In simple words, The term "cognitive reappraisal" relates to a flexible regulation technique that uses cognitive control and executive functioning to reinterpret inputs or events in the surrounding in order to alter their interpretation as well as psychological connotation.
Thus, from the above we can conclude that the correct answer is cognitive reappraisal.
All of the following assets require a title as proof of ownership, except: Group of answer choices Life insurance. Boat. Home. Vehicle.
Answers
Answer:
Life insurance.
Explanation:
A life insurance policy can be defined as a contract between a policyholder and an insurer, in which the insurer agrees to pay an amount of money to a specific beneficiary either upon the death of the insured person (decedent) or after a set period of time.
All of the following assets such as home, boat, vehicle require a title as proof of ownership, except a life insurance because no one person can present a proof to attest to the ownership of their life.
Simply stated, a life of an individual is abstract and as such can not be quantified or qualified by any document as a proof to be presented to another person or business entity. Thus, a life insurance cannot be used as a collateral to obtain credits or loans from a financial institution or investors.
Coca-Cola and PepsiCo are the leading competitors in the market for cola products. In 1960 Coca-Cola introduced Sprite, which today is the worldwide leader in the lemon-lime soft drink market and ranks fourth among all soft drinks worldwide. Prior to 1999, PepsiCo did not have a product that competed directly against Sprite and had to decide whether to introduce such a soft drink. By not introducing a lemon-lime soft drink, PepsiCo would continue to earn a $200 million profit, and Coca-Cola would continue to earn a $300 million profit. Suppose that by introducing a new lemon-lime soft drink, one of two possible strategies could be pursued: (1) PepsiCo could trigger a price war with Coca-Cola in both the lemon-lime and cola markets, or (2) Coca-Cola could acquiesce and each firm maintain its current 50/50 split of the cola market and split the lemon-lime market 30/70 (PepsiCo/Coca-Cola). If PepsiCo introduced a lemon-lime soft drink and a price war resulted, both companies would earn profits of $100 million. Alternatively, Coca-Cola and PepsiCo would earn $275 million and $227 million, respectively, if PepsiCo introduced a lemon-lime soft drink and Coca-Cola acquiesced and split the markets as listed above. If you were a manager at PepsiCo, would you try to convince your colleagues that introd
Answers
$275 million and 227 dollar million
Company Company A Company B Forecasted return 7% 11% Standard deviation of returns 8% 23% Beta 1 3 The market risk premium is 6% and the risk-free rate is 3%. Using Capital Asset Pricing Model (CAPM), will you invest in the companies
Answers
Answer and Explanation:
The computation is shown below:
As we know that
Required rate of return = Risk Free Rate + Beta × (Market Return -Risk Free Rate)
For company A
= 3% + 1 × 6%
= 9%
For Company B
= 3% + 3 × 6%
= 21%
As we can see that the forecast return should be lower than the required return so we should not invest in company A also the same is done in company B too
Therefore we dont invest in any of the company
Two people are trying to work out a trade. One person has apples and the
other has pineapples. They check a supermarket and see that apples sell
for $1 each and pineapples sell for $2 each. They agree to trade two
apples for every pineapple.
This situation best illustrates which function of money?
Answers
Answer:
Measure of Value
Explanation:
The function of money being illustrated is known as a Measure of Value. This is basically when an item's monetary values are compared when making a trade. In this scenario, both the apples and pineapples are being compared based on their monetary value. Since a single pineapple is worth twice the amount of money that a single apple is worth. Then that means that a fair trade would be two apples for every pineapple which would be a trade of the same amount of monetary value.
Winston Company reported net income of $50,000 for the year. During the year, accounts receivable decreased by $7,000, accounts payable increased by $3,000 and depreciation expense of $5,000 was recorded. Net cash provided by operating activities for the year is Group of answer choices $40,000. $65,000. $49,000. $45,000.
Answers
Answer:
$65000
Explanation:
Below is the calculation:
To find the net cash from the operating activity, we are required to add depreciation, accounts payable and accounts receivables.
Net income of the company = $50000
Add- expenses of depreciation = 5000
Add - Increase in accounts payable = 3000
Add - Decrease in accounts receivable = $7000
Thus net cash from operating activity = 50000 + 5000 + 3000 + 7000 = $65000
A legal document which summarizes the rights and privileges of bondholders as well as the obligations and commitments of the issuing company is called Group of answer choices a bond indenture. a bond debenture. trading on the equity. a term bond.
Answers
Answer:
a bond indenture
Explanation:
a bond debenture can be described as the legal contract of a bond
Features of a bond debenture
Reason why the bond was created the interest rate to earned the method by which interest is calculated Maturity datescovenantsa bond indenture is a legal document which summarizes the rights and privileges of bondholders as well as the obligations and commitments of the issuing company
Variable $100,000 $ 25,000 Fixed 150,000 75,000 Total $250,000 $100,000 What is the initial selling price needed to obtain a target profit of $50,000 using the manufacturing cost markup method
Answers
Answer: $8.00
Explanation:
Details missing in question are:
These costs are for 50,000 units.
$250,000 is manufacturing cost. $100,000 is administrative cost.
The total manufacturing cost is shown to be $250,000 above.
A profit of $50,000 is needed in addition to this cost as well as the administrative cost of $100,000.
Total revenue expected is therefore:
= 250,000 + 100,000 + 50,000
= $400,000
50,000 units are to be sold so to make a revenue of $400,000, each unit should be sold for:
= 400,000 / 50,000
= $8.00
explain the three types of resources used in businesses
Answers
Answer:
The type of business in the production sector engaged in the processing of natural resources (animals and plants) is called an agrarian business. Types of business that are included in the agricultural sector (agriculture in the broadest sense) include rice fields, plantations, forestry, animal husbandry, and fisheries.
Explanation:
[tex] \lily[/tex]
If the amount of carbonated sodas consumed continues to decline as consumers continue to choose to buy healthier products, this will likely:_____.
a. increase the demand for premium water, because premium water and carbonated sodas are considered complements.
b. decrease the demand for premium water, because premium water is considered a normal good and carbonated sodas are considered inferior goods.
c. increase the demand for premium water, because premium water and carbonated sodas are considered substitutes.
d. decrease the demand for premium water, because premium water is considered an inferior good and carbonated sodas are considered normal goods.
Answers
Answer:
c
Explanation:
Substitute goods are goods that can be used in place of another good.
carbonated sodas are considered to be unhealthy and premium water is considered to be health. If consumers reduce consumption of carbonated sodas, they would want to consume something more healthy. This can be water. thus, the goods are substitutes
Complementary goods are goods that are consumed together
If the demand for carbonated sodas decreases, there would be an increase in demand for premium water
Loaded-Up Fund charges a 12b-1 fee of 1% and maintains an expense ratio of .75%. Economy Fund charges a front-end load of 2%, but has no 12b-1 fee and an expense ratio of .25%. Assume the rate of return on both funds’ portfolios (before any fees) is 6% per year. How much will an investment in each fund grow to after?
a. 1 year?
b. 3 years?
c. 10 years?
Answers
Answer:
a. The amount in Loaded-UP Fund will grow to $104.25 after 1 year, while the amount in the Economy Fund will grow to $103.64 after 1 year.
b. The amount in Loaded-UP Fund will grow to $113.30 after 3 years, while the amount in the Economy Fund will grow to $115.90 after 3 years.
c. The amount in Loaded-UP Fund will grow to $151.62 after 10 years, while the amount in the Economy Fund will grow to $171.41 after 10 years.
Explanation:
The following are the relevant formulae to use:
Amount available in Loaded-UP Fund after a certain year = Investment * (1 + Rate of return – 12b-1 fee – Expense ratio)^Number of years ……………….. (1)
Amount available in Economy Fund after a certain year = Investment * (1 – Front-end load) * (1 + Rate of return – Expense ratio)^Number of years ……………….. (2)
Assuming investment is equal to $100 and using equations (1) and (2), we have:
a. 1 year?
Amount available in Loaded-UP Fund after 3 years = $100 * (1 + 6% - 1% - 0.75%)^1 = $104.25
Amount available in Economy Fund after 3 years = $100 * (1 - 2%) * (1 + 6% - 0.25%)^1 = $103.64
Therefore, the amount in Loaded-UP Fund will grow to $104.25 after 1 year, while the amount in the Economy Fund will grow to $103.64 after 1 year.
b. 3 years?
Amount available in Loaded-UP Fund after 3 years = $100 * (1 + 6% - 1% - 0.75%)^3 = $113.30
Amount available in Economy Fund after 3 years = $100 * (1 - 2%) * (1 + 6% - 0.25%)^3 = $115.90
Therefore, the amount in Loaded-UP Fund will grow to $113.30 after 3 years, while the amount in the Economy Fund will grow to $115.90 after 3 years.
c. 10 years?
Amount available in Loaded-UP Fund after 3 years = $100 * (1 + 6% - 1% - 0.75%)^10 = $151.62
Amount available in Economy Fund after 3 years = $100 * (1 - 2%) * (1 + 6% - 0.25%)^10 = $171.41
Therefore, the amount in Loaded-UP Fund will grow to $151.62 after 10 years, while the amount in the Economy Fund will grow to $171.41 after 10 years.
The return on investment for purchasing a solar PV system that costs $10,000 and saves $2,000 per year for 20 years is about:
Answers
Answer:
The return on investment for purchasing a solar PV system that costs $10,000 and saves $2,000 per year for 20 years is about:
= 197.6%.
Explanation:
a) Data and Calculations:
Investment cost for the purchase of a solar PV system = $10,000
Annual savings = $2,000
Period of investment = 20 years
Assumed Discount rate = 3%
Present value of Costs:
Investment cost at year 1 = $10,000
Present value annuity factor at 3% for 20 years = 14.88
Present value of savings = $29,760 ($2,000 * 14.88)
Return on investment, in Present Value terms = $19,760 ($29,760 - $10,000)
Return on investment in percentage = Return on investment/Investment cost * 100
= $19,760/$10,000 * 100 = 197.6%
Assume the credit terms offered to your firm by your suppliers are 2.7/5, Net 30. Calculate the cost of the trade credit if your firm does not take the discount and pays on day 30.
Answers
Answer: 49.02%
Explanation:
The cost of the trade credit will be calculated thus:
Amount when discount is availed will be: = 100-2.7 = 97.3
Discount rate = 2.7
Interest rate per period = 2.7/97.3 2.77%
Number of Days = 30-5 = 25
Therefore, the EAR will be calculated as:
= [(1+2.77%)^(365/25)] - 1
= 49.02%
Hugh is in charge of creating the value proposition for a new start-up company. In order for him to create an effective value proposition, what questions does he need to answer for a potential consumer
Answers
Answer:
Who is the target buyer for the offering, what is the offering to the buyer, why is the offering unique for the customer
Explanation:
Since in the given situation, it is mentioned that the hugh developed the value proposition for newly startup company so for developing the effective value proposition he need to answer the question for a consumer that involved about the target purchaser who is offering, the offering made to the buyer and the unique offering made to the customer
These 3 types of questions he need to answer
If a company selects either of Project 1 or Project 2 (or both), then either Project 3 or Project 4 (or both) must also be selected. Which of the following constraints enforce this condition?
a. X1 + X2 ≤ 2(X3 + X4)
b. X1 + X2 ≤ X3 + X4
c. X1 − X3 = X2 − X4
d. X1 + X2 + X3 + X4 ≤ 2
Answers
Answer:
b. X1 + X2 ≤ X3 + X4
Explanation:
b. X1 + X2 ≤ X3 + X4
The situation tells us that the sum of both 1 and 2 must be equal to the sum of 3 and 4 which is true, because if both projects 1& 2 are selected then the both projects 3 & 4 must also be selected.
The rest of the choices are wrong because
a. X1 + X2 ≤ 2(X3 + X4)
The sum of projects 1& 2 is not less than 2 times sum of projects 3 & 4 .
c. X1 − X3 = X2 − X4
If we leave project 3 then project 4 cannot be left out.
d. X1 + X2 + X3 + X4 ≤ 2
any two projects out of the four cannot be chosen. 1 must be chosen from 1&2 and the other from 3 &4.
