1. Heavy Duty Inc., a manufacturer of power tools, decides to offer a rebate of $120 on its 16-inch mid-range chain saw, which currently has a retail price $470.

Heavy Duty's marketers estimate that, as a result of the rebate, sales of this model will increase from 55000 to 75000 units next year. The profit margin for Heavy Duty before the rebate is

$170.

Based on the given information, is the decision to give the rebate a wise one?

A.No, since costs are

$5,600,000

more than benefits.

B.Yes, since the benefits are

$2,800,000

more than the costs.

C.No, since costs are

$6,600,000

more than benefits.

D.Yes, since the benefits are

$6,100,000

more than the costs.

2.

Suppose that a young couple has just had their first baby and they wish to insure that enough money will be available to pay for their child's college education. They decide to make deposits into an educational savings account on each of their daughter's birthdays, starting with her first birthday. Assume that the educational savings account will return a constant

10%.

The parents deposit

$2,300

on their daughter's first birthday and plan to increase the size of their deposits by

5%

each year. Assuming that the parents have already made the deposit for their daughter's 18th birthday, then the amount available for the daughter's college expenses on her 18th birthday is closest to:

A.

$145,052

B.

$159,557

C.

$101,536

D.

72526

3. Liam had an extension built onto his home. He financed it for 48 months with a loan at 5.7% APR. His monthly payments were $700. How much was the loan amount for this extension?

A.

$29,981

B.

$41,974

C.

$35,978

D.

47970