Final Assignment: (Due Oct 5,2018)

Present Money/Present Economy Problems

1. A machine part to be machined may be either from an alloy of aluminum or steel. There is an order for 8,000
units. Steel costs P3.80 per kg, while aluminum costs P8.70 per kg. If steel is used, the steel per unit weighs
110 grams; for aluminum, 30 grams. When steel is used, 50 units can be produced per hour; for aluminum,
80 units per hour with the aid of a tool costing P640, which will be useless after the 8,000 units are finished.
The cost of the machine and operator is P10.80 per hour. If all other costs are identical, determine which
material will be more economical.
2. An engineer business minded wishes to earn 7% on his capital after payment of taxes. If the income from an
available investment will be taxed at an average rate of 42%, what minimum rate of return, before payment of
taxes, must the investment offer to be justified?
3. XXY Corporation’s gross margin is 45% of sales. Operating expenses such as sales and administration are
15% of sales. XXT Corporation is in 40% tax bracket. What percent of sales is their profit after taxes?
4. The ore of a gold mine in the Mountain Province contains, on the average, 0.5 gram of gold per ton. One
method of processing cost P1,650 per ton and recovers 93% of the gold, while another method cost only
P1,500 per ton and recovers 81% of the gold. If gold can be sold at 8,500 per gram, which method is better
and by how much?
5. A certain manufacturing company received an order for producing 100,00 pieces of a certain machine part. A jig
is necessary for production and two designs are presented whose properties are as follows:

Jig A Jig B
Estimated Life 100,000 pcs 100,00 pcs
First Cost P5,000.00 P4,200.00
Hourly wage of operator P30.00 P25.00
Number of pcs produced/hr 100 80
If the only consideration is economy of operation, determine which jig should be used.