A. $1,737.82 Explanation: Profit is calculated as revenue minus cost. As this is a quadratic equation, the maximum profit is determined as the vertex of the function: -b/2a = -665.75/(2*(-11.3)) = -665.75/-22.6 = 29.46. At this value, the profit formula reaches its peak yielding approximately 1737.81992.
Answer:
$1 million
Explanation:
The anticipated payout for holders of bond B is the total recoverable amount from asset liquidation, minus the secured bond A's valuation which stands at $2 million.
The recoverable figure includes the office building valued at $1 million alongside $2 million worth of additional assets.
This is justified as bond A is secured against the office building worth $1 million, making both bonds equal in standing at $1 million each from the proceeds available afterwards.
The correct selection is option (b).
Annual benefits and costs for each project are presented.
Calculating the B-C ratio for project A, we find:
Annual benefits = $1,800,000;
Annual costs = $2,000,000;
B-C ratio = Annual benefits / Annual costs = $1,800,000 / $2,000,000 = 0.90.
Project A's B-C ratio is 0.90.
In a similar manner, for project B:
Annual benefits = $5,600,000;
Annual costs = $4,200,000;
B-C ratio = $5,600,000 / $4,200,000 = 1.33.
The B-C ratio for Project B is 1.33.
Following the same calculations for projects C, D, and E yields respective B-C ratios of 1.24, 0.93, and 1.22.
Considering that the agency will fund projects with a B-C ratio of at least 1, projects A and D will not be funded. Among the remaining, Project B offers the highest B-C ratio, making it the selected project.
