chandler Oil has 5000 barrels of crude oil 1 and 10,000 barrels of crude oil 2 available. Chandler sells gasoline and heating oil. These products are produced by blending the two crude oils together. Each barrel of crude oil 1 has a quality level of 10 and each barrel of crude oil 2 has a quality level of 5.6 Gasoline must have an average quality level of at least 8, whereas heating oil must have an average quality level of at least 6. Gasoline sells for $75 per barrel, and heating oil sells for $60 per barrel. In addition, if any barrels of the crude oils are leftover, they can be sold for $65 and $50 per barrel, respectively. (This opion wasn’t part of the model before the fifth edition of the book.) We assume that demand for heating oil and gasoline is unlimited, so that all of Chandler’s production can be sold. Chandler wants to maximize its revenue from selling gasoline, heating oil, and any leftover crude oils.

Objective:

To develop an LP spreadsheet model for finding the revenue-maximizing plan that meets quality constraints and stays within limits on crude oil availabilities.

and Write an appropriate mathematical Model for this problem

Brady Construction Company contracted to build an apartment complex for a price of $6,400,000. Construction began in 2018 and was completed in 2020. The following is a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars.

Brady Construction Company contracted to build an apartment complex for a price of $6,400,000. Construction began in 2018 and was completed in 2020. The following is a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars.

Cross selling is a major activity at financial institutions.  One regional bank classifies its 100,000 individual customers into 4 groups: a) Basic services (checking, savings accounts), b) Lending (mortgages, loans), c) Investment (mutual funds, bonds), and d) Financial planning (retirement, trusts, comprehensive financial planning).

Customers in each of the four categories generate net (of servicing costs) revenue of $100, $200, $300, and $1,000 per year respectively.  Currently the mix of customers is 70%, 10%, 15%, and 5% in the four types.  Retention rates are 90% across the board.  Retention costs (note: these are different from servicing costs) per account are $80, $120, $150, and $200 respectively per year.  In order to improve performance, three major strategies are under consideration:

Increase net revenue per customer by 10% across the board

Change the customer mix to 60%, 15%, 18%, and 7%

Increase retention in Financial planning group to 95%

1.What is the CLV in each of the current customer categories? (Assume a 10% discount rate)

2.What would be the increase in the bank’s average CLV if each of the three suggested strategies were implemented separately? (assuming servicing costs are constant and same discount rate)

Use the formula for computing CLV

Problem 2 Your company, Dominant Retailer, Inc., is considering a project whose data are shown below. Revenue and cash operating expenses are expected to be constant over the project's 5 year expected operating life; annual sales revenue is $95,000.00 and cash operating expenses are $37,500.00. The new equipment's cost and depreciable basis is $135,000.00 and it will be depreciated by MACRS as 5 year property. The new equipment replaces older equipment that is fully depreciated but can be sold for $7,500. In addition, the new equipment requires an additional $5,000 of net operating working capital, which can be fully recovered at the end of the project. The new equipment is expected to be sold for $10,995 at the end of the project in year 5. The marginal tax rate is 28.00%. What is the project's Initial Cash Outlay at Year 0? Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.

Using the information from problem 2 on Dominant Retailer, Inc., what is the NPV of the Project if Dominant Retailer’s WACC is 12.75%? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.

The Sherman Antitrust Act was put into place to break up monopolies. In the late 1800s, John D. Rockefeller got rich monopolizing oil, J.P. Morgan did the same with the railroads, so the Sherman Antitrust (kind of like anti-monopoly) Act was created in 1890, and then the Clayton Act in 1915 came along to close up loopholes. Now give me a normative argument: if I create something new, shouldn't I get to make monster profits on it? Isn't Zuckerberg a monopolist of Facebook? Or what? Microsoft got hit with antitrust violations because they were dominating the market with Windows... was that wrong? What do you think?

1. Explain why price is always larger than marginal revenue for a monopoly and for what kind of firm is marginal revenue and price the same?

2. What kind of firms choose to maximize profit and What kind of firms maximize profit by setting MR=MC

3. Here's why we like to regulate or destroy monopolies. For a short time, I lived on a small island of Eskimos in Alaska, with an Innuit tribe, in a town called Shishmaref. They had one grocery store, where lettuce was $12/head. So I never bought any. Briefly explain what the deadweight loss was in this scenario.

  
Required:
Using the trial balance provided above, prepare an income statement and statement of changes in equity for the first month ended May 31, 2017, and a balance sheet at May 31, 2017.

  
Analysis Component:
Upon review of the trial balance, the balance at May 31, 2017 for utilities expense is $1,320. Create a journal entry that might have created this balance. Create a second entry when the May utility bill is to be paid in the next month. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

The balance in the utilities expense account could have arisen on account of one of the following entries.

Rosie Dry Cleaning was started on January 1, 2018. It experienced the following events during its first two years of operation:

Events Affecting 2018

1. Provided $32,050 of cleaning services on account.
2. Collected $25,640 cash from accounts receivable.
3. Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account.

Events Affecting 2019

1. Wrote off a $240 account receivable that was determined to be uncollectible.
2. Provided $37,402 of cleaning services on account.
3. Collected $33,101 cash from accounts receivable.
4. Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account.

Required

1. Organize the transaction data in accounts under an accounting equation for each year.
2. Determine the following amounts:

1. (1) Net income for 2018.
2. (2) Net cash flow from operating activities for 2018.
3. (3) Balance of accounts receivable at the end of 2018.
4. (4) Net realizable value of accounts receivable at the end of 2018.

3. Determine the following amounts:

1. (1) Net income for 2019.
2. (2) Net cash flow from operating activities for 2019.
3. (3) Balance of accounts receivable at the end of 2019.
4. (4) Net realizable value of accounts receivable at the end of 2019.

Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made.

The pizzeria’s cost formulas appear below:

In November, the pizzeria budgeted for 2,010 pizzas at an average selling price of $14 per pizza and for 210 deliveries.

Data concerning the pizzeria’s actual results in November appear below:

Required:

1. Compute the revenue and spending variances for the pizzeria for November. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)