Formulating the benefit-cost ratio criteria

Reference no: EM131789405

Question: 1-a) A woman has 20 more years of service. She wants to deposit Rs 5000 at the end of the first year and thereafter increase her investment by Rs 1000 each year. Find the total amount she will receive at the end of the 15^th year at an interest rate of 10%?

b) If Market Supply and Demand functions are given as Qs= 20000 - 30P and Qd=40000 - 20P respectively, determine the equilibrium price and quantity. If the increase in demand makes the demand function Qd= 50000 - 20P, what is the new equilibrium price and quantity.

2-a) Haryana government is considering to extend Bhakra canal into a desert area for irrigation. The initial cost of the project is expected to be Rs 3.75 crore with annual maintenance costs of Rs 6.25 lakhs per year. If the agricultural revenue is expected to be Rs 47 lakhs per year, evaluate it on Benefit-cost ratio criteria for a 15 years study period at a discount rate of 5% per year. (Use Present Worth for analysis).

b) An industry producing moulded luggage has established that the unit selling price of one of its models and its annual demand bears an empirical relation as: P = 50000 - 0.25Q. If the Total fixed cost and Average variable cost associated with the model be Rs 10 lakhs and Rs 750 respectively. What is the quantity at which the profit is maximized and what is the maximum profit?

Reference no: EM131789405

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