At what point the net profit will begin to decline

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Question: Dispatch Die-Casting currently produces 200 castings per month and realizes a profit of $300 per casting. The company now spends $2000 per month on research and development and has a fixed operating cost of $20,000 per month that does not depend on the amount of production. If the company doubles the amount spent on research and development, it is estimated that production will increase by 20 percent. The company president would like to know, beginning with the current status and successively doubling the amount spent on research and development, at what point the net profit will begin to decline.

Reference no: EM131782648

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