Homework 1-1 ES 382 Homework 1 1. If you rent a car, you can (1) return it with
ID: 1866975 • Letter: H
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Homework 1-1 ES 382 Homework 1 1. If you rent a car, you can (1) return it with a full gas tank, (2) return it without filling it and pay $3.45/gallon or (3) accept a fixed price of $35 for full tank of gas. The local price is $3.15/gallon of gasoline and you expect the car to get 28 mpg. The car has 20-gallon tank. What choice should you make if you expect to drive 350 miles? 2. A breakeven graph for an investment on a blouse is given to the right. The y-axis is the amount in thousands of dollars. Answer (estimate) the following: 2,500 a) Give the equation for total revenue in terms of volume of sales. 2000 b) Give the equation for total costs in terms of volume of sales. c) What is the breakeven level of sales? d) If you sell 22,000 blouses this year, will you have a profit or loss? Break-even point 1,500 1,000 500 5,000 10,000 15,000 20,000 25,000 30,000 Volume in blousesExplanation / Answer
b) 350 Miles : no of gallons consumed, N = 350/28 = 12.5 Gallons
(1) return it with a full gas tank : Capacity is 20G while used is 12.5G.
So cost of refuelling to fll capacity of 20G = 12.5*3.15 = $39.38
(2) return it without filling it and pay $3.45/gallon :
Gallons used is 12.5. So Fuel cost = 12.5*3.45 = $43.13
3) 350 Miles. accept a fixed price of $35 for gas : cost = $35
Therefore, You should accept $35 fixed price.
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