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A company sells two products with information as follows: B Price per unit $12 $20 Variable cost per unit $10 $12 Products are made by
A company sells two products with information as follows: B Price per unit $12 $20 Variable cost per unit $10 $12 Products are made by machine. 4 units of Product A can be made with one machine hour and 2 units of Product B can be made with one machine hour. The company has a maximum of 3,000 machine hours available per month. The company can sell up to 7,000 units of Product A per month, and up to 3,000 units of Product B for the month. What is the optimum product mix to maximize company's operating income? Select one: a. 6,000 units of A; 3,000 units of B b. 12,000 units of A; zero units of B 2,000 units of A; 4,000 units of B d. zero units of A; 3,000 units of B The following details are provided by Dopler Company: Project A Project B Project C Project D Initial investment $420,000 $200,000 $550,000 $500,000 PV of cash inflows $570,000 $380,000 $800,000 $390,000 Payback period (years) 3.6 4.0 2.0 NPV of project $150,000 $180,000 $250,000 ($110,000) Which project has the highest profitability index? 3.21 Select one: a. Project B b. Project D c. Project A d. Project C
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