MATH179 Group Presentation Week 12 Group D D1. The Rubber and Steel company is planning to manufacture a new product. The variable costs will be $61 per unit and the fixed costs are estimated at $5904. To be competitive, the selling price of the product is to be $150. Determine the a) contribution margin, b) contribution rate, c) break-even point in units, d) break-even point in sales dollars. D2. A deposit of $2000 earns interest at 3% per annum compounded quarterly. After two-and-a-half years, the interest rate is changed to 2.75% compounded monthly. How much is the account worth after 6 years. D3. Jeff purchased a new car by making a down payment of $2000 and agreeing to make payments of $458 at the end of every month for five years. Interest is 9.2% per annum compounded monthly. a) What is the purchase price of the car? b) How much interest does Jeff have to pay? Group E E1. Rosemary is planning to make fancy wedding cakes. To make the cakes she must invest $834 in specialist baking pans and tools. To get started she will also invest $1800 in advertising. The cost of supplies and materials for each cake is estimated to be $60, and she is planning to sell each cake for $499. Determine the a) contribution margin, b) contribution rate, c) break-even point in units, d) break-even point in sales dollars. E2. An investment of $2500 earns interest at 4.5% per annum compounded monthly for three years. At that time the interest rate is changed to 5% compounded quarterly. What is the value one-and-a-half years after the change in interest rate? E3. You want to receive $600 at the end of every three months for five years. Interest is 7.6% per annum compounded quarterly. a) How much would you have to deposit at the beginning of the five year period? b) How much of what you will receive is interest? 1 Group F F1. Bob is trying to decide whether he should work for Part-time Painters. He would operate as an independent painter, but the jobs would be given to him by the company. The advertised price per room for painting is $100, and Bob would receive 80% of this amount. For each job, the painter would supply paint and brushes, at a cost of $38. Each painter must have their own ladders, drop cloths etc at a cost of $720. Determine the a) contribution margin, b) contribution rate, c) break-even point in units, d) break-even point in sales dollars. F2. A debt of $800 accumulates interest at 10% compounded semi-annually from February 1 2013 until August 1 2015, and at 11% compounded quarterly thereafter. Determine the value of the debt on November 1 2018. F3. An installment contract for the purchase of a car requires payments of $252.17 at the end of each month for the next three years. Suppose that interest is 8.4% per annum compounded monthly. a) What is the amount financed? b) How much is the interest cost? 2