Exhibit 8.1
The following questions pertain to the problem and spreadsheet below.
A company makes products A and B from 2 resources,labor and material.The company wants to determine the selling price which will maximize profits.A unit of A costs 25 to make and demand is estimated to be 20 ? .10 * Price of A.A unit of B costs 18 to make and demand is estimated to be 30 ? .07 * Price of B.The utilization of labor and materials and the available quantity of resources is shown in the table.A reasonable price for the products is between 100 and 200.
$\begin{array}{lccc}
\text { Product } & \text { A } & \text { B } & \text { Avalable resources } \
\hline \text { Labor hr/unit) } & 3 & 2 & 150 \
\text { Material ounces/unit) } & 1 & 2 & 200 \
\text { Manufacturing cost\$/unit) } & 25 & 18 & \
\text { Demand units) } & 20-.10^{*} \mathrm{P}_{1} & 30-.07^{*} \mathrm{P}_{2} &
\end{array}$
Let X 1 = demand for As and X 2 = demand for Bs.Let P 1 = price for As and P 2 = price for Bs

-An investor wants to determine how much interest he must earn to be able to make the payments on a 10-year mortgage which has increasing annual payments.The problem is summarized in the accompanying spreadsheet.The investor has enough money to make an initial investment of $9,000 and hopes he can earn 12%,compounded quarterly,on his investments.He would like to know how low his annual return can be and still allow him to make his payments from interest income.What constraint must be entered in the Risk Solver Platform RSP)task pane?

A)$D$7:$D$16 ? $E$7:$E$16
B)$C$7:$D$16 ? $E$7:$E$16.
C)$C$7:$C$16 ? $E$7:$E$16
D)$D$7:$D$16 ? $E$7:$E$16 .

Question

Exhibit 8.1
The following questions pertain to the problem and spreadsheet below.
A company makes products A and B from 2 resources,labor and material.The company wants to determine the selling price which will maximize profits.A unit of A costs 25 to make and demand is estimated to be 20 ? .10 * Price of A.A unit of B costs 18 to make and demand is estimated to be 30 ? .07 * Price of B.The utilization of labor and materials and the available quantity of resources is shown in the table.A reasonable price for the products is between 100 and 200.
 $\begin{array}{lccc}
\text { Product } & \text { A } & \text { B } & \text { Avalable resources } \
\hline \text { Labor hr/unit) } & 3 & 2 & 150 \
\text { Material ounces/unit) } & 1 & 2 & 200 \
\text { Manufacturing cost\$/unit) } & 25 & 18 & \
\text { Demand units) } & 20-.10^{*} \mathrm{P}_{1} & 30-.07^{*} \mathrm{P}_{2} &
\end{array}$
 Let X 1 = demand for As and X 2 = demand for Bs.Let P 1 = price for As and P 2 = price for Bs
 
-An investor wants to determine how much interest he must earn to be able to make the payments on a 10-year mortgage which has increasing annual payments.The problem is summarized in the accompanying spreadsheet.The investor has enough money to make an initial investment of $9,000 and hopes he can earn 12%,compounded quarterly,on his investments.He would like to know how low his annual return can be and still allow him to make his payments from interest income.What constraint must be entered in the Risk Solver Platform RSP)task pane?

A)$D$7:$D$16 ? $E$7:$E$16 
B)$C$7:$D$16 ? $E$7:$E$16. 
C)$C$7:$C$16 ? $E$7:$E$16 
D)$D$7:$D$16 ? $E$7:$E$16 .

Quizplus · Accepted Answer

The constraint in this case needs to ensure that the investor earns enough interest income to make the increasing annual payments on the mortgage. Therefore, the constraint should state that the total interest earned ($D$7:$D$16), which is the cash flow available for paying the mortgage, must be greater than or equal to the annual payment amounts ($E$7:$E$16). This constraint can be expressed as $D$7:$D$16 ≥ $E$7:$E$16, which is option D.

Exhibit 81 the Following Questions Pertain to the Problem and Spreadsheet

Exhibit 81
the Following Questions Pertain to the Problem and Spreadsheet