CPAR

CPA REVIEW SCHOOL OF THE PHILIPPINES

Manila

MANAGEMENT ADVISORY SERVICES MAS 9011

QUANTITATIVE METHODS
QUANTITATIVE METHODS (Operations Research) – various applications of mathematics in
business or any complex system.

OPERATIONS RESEARCH – specifically, the discipline of applying quantitative methods oriented to

planning.

NETWORK MODELS

NETWORK MODELS involve project scheduling techniques that are designed to aid the planning and
control of large-scale projects having many interrelated activities.

USES OF NETWORK ANALYSIS

1. Planning 4. Forecasting future progress
2. Measuring progress to schedule 5. Predicting and controlling costs
3. Evaluating changes to schedule

SAMPLE APPLICATIONS
1. Building construction 4. Feasibility studies
2. Book publishing 5. Research and developments projects
3. New product planning 6. Auditing

PROJECT SCHEDULING TECHNIQUES

1. Gantt or bar charts
2. Program Evaluation and Review Technique (PERT)
3. Critical Path Method (CPM)

• Gantt or Bar Charts – a type of bar chart that illustrates the scheduled start and finish 0f
elements of a project over time.

• Program Evaluation And Review Technique – developed to aid managers in controlling large-
scale, complex problems.

Pert Diagram – a probabilistic diagram of the interrelationship of a complex series of activities; a

free-form network showing each activity as a line between events.
Events – discrete moments in time representing the start or finish of an activity; they consume no
resources.
Activities – tasks to be accomplished; they consume resources, (including time) and have a
duration over time

➢ Types of Activity
1. Series – an activity cannot be performed unless another activity is undertaken.
2. Parallel – can be performed simultaneously.

➢ Critical Path – longest path through the network

Expected time (te) – the average time an activity would require if it were repeated a
large number of times.
te = to + 4tm + tp
6
where:
to – optimistic time
tm – most likely time
tp – pessimistic time
MAS 9011 QUANTITATIVE METHODS Page 2 of 12

Slack time – the amount of time that can be added to an activity without increasing the
total time required on the critical path; the length of time an activity can
be delayed without forcing a delay for the entire project.

• Critical Path Method (CPM) – like PERT, it is a network technique, but unlike PERT, it uses
deterministic time and cost estimates; its advantages include cost estimates plus the
concept of crash efforts and costs.

Crash time – time to complete an activity assuming that all available resources were devoted
to the task (overtime, extra crew, etc.)

EXERCISES IN NETWORK ANALYSIS

1. The Gantt Chart below shows that the project is

NOW
Time in Weeks
Activity 2 4 6 8 10 12 14 16

LEGEND: FINISHED

IN PROCESS OR NOT FINISHED YET.

a. Complete c. On schedule
b. Ahead of schedule d. Behind schedule

2. PERT NETWORK. All audits have a critical path, but auditors seldom recognize it as such
without the aid of network analysis. In the auditing of liabilities, the following activities and
estimated times have been identified:

0–1 Obtain schedule of liabilities 2

1–2 Mail confirmations 12
2–6 Process confirmations 39
6–7 Investigate debit balances 5
1–3 Vouch selected liabilities 64
3–4 Test accruals and amortization 4
1–4 Test pension plan 4
4–5 Reconcile interest expense to debt 8
5–7 Verify debt restriction compliance 5
7–8 Review subsequent payments 10

Required: The PERT Network, identifying the critical path and including slack times.

2. New York Building Corporation uses the critical path method to monitor construction jobs. The
company is currently 2 weeks behind schedule on Job #181, which is subject to a P10,500
per-week completion penalty. Path A-B-C-F-G-H-I has a normal completion time of 20 weeks,
and critical path A-D-E-F-G-H-I has a normal completion time of 22 weeks. The following
activities can be crashed.
MAS 9011 QUANTITATIVE METHODS Page 3 of 12

Cost to Crash Cost to Crash

Activities 1 Week 2 Weeks
CF P 8,000 P15,000
FG 11,000 21,500
HI 8,500 20,000

New York Building desires to reduce the normal completion time of Job # 181 and, at the same
time, report the highest possible income for the year. New York Building should crash

a. Activity FG 1 week and activity HI 1 week. c. Activity HI 2 weeks

b. Activity CF 1 week and activity FG 1 week. d. Activity FG 2 weeks

LEARNING CURVES

LEARNING CURVES describe the efficiencies arising from experience, because with experience
comes increased productivity. This productivity increases with production size, but at a
decreasing rate as diagrammed below:

Productivity

Experience
The time required to perform a given task becomes progressively shorter, but this is
applicable only to the early stages of production or any new task.

The curve is expressed as a percentage of reduced time (usually between 60% and 80%) to
complete a task of each doubling of cumulative production. Hence, the time required is
reduced by 20% to 40% each time cumulative production is doubled.

Assumptions:
1. The cumulative average time per unit is reduced by a certain percentage each time
production doubles.
2. Incremental unit time (time to produce the last unit) is reduced when production
doubles.

EXERCISES IN LEARNING CURVES

1. The Pabibo Company uses labor standards in the manufacture of its products. Based upon
past experience, the company considers the effects of a 70% learning curve when developing
standards for direct labor costs.

The company is planning the production of a new product. The production of the first unit is
expected to require 80 hours of direct labor time at a standard rate of P5 per hour. A steady
state production phase with no further increases in labor productivity is expected after the
production of the 16th unit.

REQUIRED: a. What is the cumulative average time per unit after eight units are completed?
b. What is the total time required to produce 4 units?
c. How many hours are required to produce additional three units?

2. Theenaxan Company currently buys a component for one of its products at P10 per unit.
Theenaxan needs 16,000 units of the component in the coming year. The product will be
redesigned, so that the component will not be needed beyond the coming year. The production
manager believes that Theenaxan could make the component with the following costs for the
first batch of 1,000 units.
MAS 9011 QUANTITATIVE METHODS Page 4 of 12

Materials P5,000
Direct labor and variable overhead 15,000
Total variable cost P20,000

Making the component involves no incremental fixed costs because Theenaxan could use
existing equipment. The production manager expects an 80% learning rate on direct labor and
variable overhead. Consider a batch to be 1,000 units.

Required: Determine whether Theenaxan should make or buy the component.

3. Which of the following unfavorable variances would be directly affected by the relative position
of a production process on a learning curve?
a. Material mix c. Labor rate
b. Materials price d. Labor efficiency

4. The average labor cost per unit for the first batch produced by a new process is P120. The
cumulative average labor cost after the second batch is P72 per product. Using a batch size
of 100 and assuming the learning curve continues, the total labor cost of four batches will be
a. P4,320 c. P17,280
b. P2,592 d. P28,800

5. A construction company has just completed a bridge over the Visayan area. This the first bridge
the company ever built and it required 100 weeks to complete. Now having hired a bridge
construction crew with some experience, the company would like to continue building bridges.
Because of the investment in heavy machinery needed continuously by this crew, the company
believes it would have to bring the average construction time to less than one year (52 weeks)
per bridge to earn a sufficient return on investment. The average construction time will follow
an 80% learning curve. To bring the average construction time (over all bridges constructed)
below one year per bridge, the crew would have to build approximately
a. 2 additional bridges. c. 7 additional bridges.
b. 3 additional bridges. d. 8 additional bridges.

PROBABILITY ANALYSIS

PROBABILITY is important to management decision-making because of the unpredictability of future

events.

Decision-making under conditions of risk – occurs when the probability distribution of the possible
future states of nature is known.

Decision-making under conditions of uncertainty – occurs when the probability distribution of possible
future states of nature is not known and must be subjectively determined.
The probability of an event varies from 0 to 1 (or 0 to 100%)
a. 0 probability – the event cannot occur
b. Probability of 1 (or 100%) – the event is certain to occur

BASIC TERMS USED WITH PROBABILITY

1. Two events are mutually exclusive if they cannot occur simultaneously.
2. The joint probability of two events is the probability that both will occur.
3. The conditional probability of two events is the probability that one will occur given that the
other has already occurred.
4. Two events are independent if the occurrence of one has no effect on the probability of the other.

• Expected value
The expected value of an action is found by multiplying the probability of each outcome by its
pay-off and summing the products.
MAS 9011 QUANTITATIVE METHODS Page 5 of 12

EXERCISES IN PROBABILITY

1. Uncertainty and expected costs. Chichamart Corp, an international retail giant, is

considering implementing a new business to business (B2B) information system for
processing purchase orders. The current system costs Chichamart P2,500,000 per month
and P50 per order. Chichamart has two options, a partially automated B2B and a fully
automated B2B system. The partially automated B2B system will have a fixed cost of
P10,000,000 per month and a variable cost of P40 per order. The fully automated B2B
system has a fixed cost of P20,000,000 per month and P25 per order.

Based on data from the last two years, Chichamart has determined the following distribution
on monthly orders:

Monthly Number of Orders Probability

350,000 15%
450,000 20%
550,000 35%
650,000 20%
750,000 10%

REQUIRED:
1. What is the expected cost of each plan?
2. In addition to the information systems costs, what other factors should Chichamart
consider before deciding to implement a new B2B system?

3. Chichamart should consider the impact of the different systems on its relationship with suppliers. The
interface with Chichamart’s system may require that suppliers also update their systems. This could
cause some suppliers to raise the cost of their merchandise. It could force other suppliers to drop out of
Chichamart’s supply chain because the cost of the system change would be prohibitive. Chichamart may
also want to consider other factors such as the reliability of different systems and the effect on employee
morale if employees have to be laid off as it automates its systems.

ITEMS 2 and 3 ARE BASED ON THE FOLLOWING:

A computer store sells four computer models designated as P104, X104, A104, and S104.
The store manager has made random number assignments to represent customer choices
based on past sales data. The assignments are shown below.
Model Random Numbers
A 0–2
B 3–6
C 7–8
D 9

2. The probability that a customer will select model B is

a. 10% c. 40%
b. 20% d. 30%

3. In running a simulation of the computer demand, the following numbers are drawn in
sequence: 2, 1, and 5. The simulation indicates that the third customer will purchase:
a. Model A c. Model C
b. Model B d. Model D

4. The probabilities shown in the table represent the estimate of sales for a new product:
Sales (units) Probability
0 - 100 10%
101 - 200 40%
201 - 300 30%
301 - 400 20%
MAS 9011 QUANTITATIVE METHODS Page 6 of 12

What is the best estimate of the expected sales of the new product? 210

5. A company uses two major material inputs in its production. To prepare its manufacturing
operations budget, the company has to project the cost changes of these material inputs. The
cost changes are independent of one another. The purchasing department provides the following
probabilities associated with projected cost changes:
Cost Change Material 1 Material 2
3% increase 0.5 0.1
5 % increase 0.2 0.4
10% increase 0.3 0.5
The probability that there will be a 5% increase in the cost of both Material 1 and Material 2 is
a. 15% c. 5%
b. 8% d. 60%

Joint probability of occurrence of two independent events = product of their individual probabilities.
0.20 X 0.40 = 8%

6. A firm will produce either product A or B. The total costs (TC) for both products can be
estimated by the equations
Product A TC = P200,000 + (P15 x Sales Volume)
Product B: TC = P300,000 + (P10 x Sales Volume)

The firm believes there is a 30% chance for the sales volume of each product to equal 20,000
units and an 70% chance they will both equal 30,000 units. The selling price of product A is
P40, and the selling price of product B is P50. The expected profit from producing product B
equals
a. P 780,000 c. P475,000
b. P1,050,000 d. P1,700,000

Expected value of sales in units: (20,000 x 30%) + (30,000 x 70%) = 27,000

[(P50 – P10) x 27,000] – P300,000 = P780,000

ITEMS 7 to 9 ARE BASED ON THE FOLLOWING INFORMATION:

The local chapter of JPIA is planning to conduct a fund raising project by selling roses on
Valentine’s Day. The roses, which can be purchased from a nearby supplier at P5 each, will be
sold to the students for P15 each. Any unsold roses at the end of the day will be discarded.

The estimated numbers of roses that can be sold on such day, as well as their probabilities, as
follows:
Units of Roses Probability
600 0.20
800 0.30
1,000 0.40
1,200 0.10

7. What is the estimated sales of roses (in units) using an expected value approach?
a. 880 c. 900
b. 1,000 d. 400

8. What is the estimated unit sales of roses on Valentine’s Day using a deterministic approach
based on the most likely outcome?
a. 880 c. 900
b. 1,000 d. 400

9. What is the conditional profit of purchasing 1,000 units of roses but selling only 800 units?
a. P7,000 c. P2,100
b. P8,000 d. P2,800

7. B Units of Roses Probability Weighted Units

600 0.20 120
800 0.30 240
1,000 0.40 400
MAS 9011 QUANTITATIVE METHODS Page 7 of 12

1,200 0.10 120

Estimated sales, expected value approach 880 units

8. B In a deterministic approach, it is assumed that a value is known with certainty. Per the requirement, the
value is based on the most likely outcome. Thus estimated sales is 1,000 units, the estimate with the highest
probability (40%).

9. A Sales (800 units x P15) P12,000

Less cost (1,000 x P5) 5,000
Conditional profit P 7,000

DECISION TREE

Arbor Company needs a component part for the production of a new product. The component part is
available from local suppliers, but the company can make it with the use of a special equipment which
it can rent for P18,000 per month.

Each new product requires one component part. Thus, production requirement for the part is the
same as the demand for the new product, which could be high (5,000 units per month), with
probability of 60%, or low (2,000 units per month).

The contribution margin per unit of the new product is P15 if the company will make the part, and
P12 if the part is purchased from local suppliers.

The company’s management accountant prepared the following decision tree to help management
select the better alternative:

Decision Demand Payoff (Contribution)

5,000 units (60%) P60,000 36,000
Buy the component part
2,000 units (40%) 24,000 9,600 45,600

5,000 units (60%) 57,000 34,200

Make the component part

2,000 units (40%) 12,000 4,800 39,000

Should the company make, or buy the part? Buy. Expected value is P45,00; (vs. 39,000)

LINEAR PROGRAMMING

LINEAR PROGRAMMING – a technique used to optimize an objective function (maximize revenue or

profit function, or minimize a cost function), subject to constraints (such as scarce resources,
minimum/maximum levels of production, performance, etc.)

In business, linear programming is used for planning resource allocations (to make optimum use of
limited resources). Conditions calling for the use of linear programming include:
1. specification of a cost or revenue objective formula.
2. the limited resources must be subject to alternative uses.
3. the alternative uses of the limited resources must be specified.

EXERCISES IN LINEAR PROGRAMMING

1. XY Company has two products, Product X and Product Y, that it manufactures through its
production facilities. The contribution margin for Product X is P15 per unit, whereas Product
Y’s contribution margin is P25 per unit. Each product uses Materials A and B. Product X uses
3 kilos of Material A, and Product Y uses 6 kilos. Product X requires 6 feet of Material B and
Product Y uses 4 feet.

The company can only purchase 600 kilos of Material A and 880 feet of Material B.
MAS 9011 QUANTITATIVE METHODS Page 8 of 12

REQUIRED:
a. Formulate the objective function and all of the constraints in order to maximize
contribution margin.

b. How many units of each product (X and Y) should be produced to maximize the total
contribution margin?
c. Calculate the contribution margin at the optimal solution.

2. Galaxy Candy Company manufactures two popular candy bars, the Eclipse bar and the Nova
bar. Both candy bars go through a mixing operation where the various ingredients are
combined, and the Coating Department where the bars from the Mixing Department are coated
with chocolate. The Eclipse bar is coated with both white and dark chocolate to produce a
swirled effect. A material shortage of an ingredient in the Nova bar limits production to 300
batches per hour. Production and sales data are presented in the following table.

Mixing Coating
Available capacity in hours 525 500
Use of capacity in hours per batch of product:
Eclipse 1.5 2.0
Nova 1.5 1.0

Management believes that Galaxy can sell all of its daily production of both the Eclipse and
Nova bars. Other data follow:
Eclipse Nova
Selling price per batch P600 P700
Variable cost per batch 200 450

REQUIRED:
a. Formulate the objective function and all of the constraints in order to maximize
contribution margin.

Objective Function 400E + 250N

Subject to:
N ≤ 300
1.5E + 1.5N ≤ 525
2E + N ≤ 500

b. How many batches of each type of candy bar (Eclipse and Nova) should be produced to
maximize the total contribution margin? 150 of Eclipse and 200 of Nova
c. Calculate the contribution margin at the optimal solution. P110,000

2. Kapayapaan, Inc. manufactures Product C and Product A which are processed as follows:
Type D Machine Type B Machine
Product C 6 hours 4 hours
Product A 9 hours 5 hours

The contribution margin is P12 for Product C and P7 for Product A. The available time daily
for processing the two products is 120 hours for Machine Type D and 80 hours for Machine
type B. How would the restriction (constraint) for Machine Type D be expressed?
a. 4C + 5A c. 6C + 9A < 120
b. 4C +5A < 80 d. 12C + 7A

3. Leodegaria Corporation produces a product in 100 gallon batches. The basic ingredients used
are material A costing P10 per gallon and Material B costing P20 per gallon. No more than 1
gallon of B can be used, and at least 15 gallons of A must be used.

How would the objective function (minimization of product cost) be eApressed?

a. 20B + 10A c. B + 15A
b. 10B + 20A d. 20B +150A
MAS 9011 QUANTITATIVE METHODS Page 9 of 12

4. The Katangalan Company plans to expand its sales force by opening several new branch
offices. Katangalan will consider opening only two types of branches: 20-person branches
(Type A) and 10-person branches (Type B). Expected initial cash outlays are P1,300,000 for
a Type A branch and P670,000 for a Type B branch. Expected annual cash inflow, net of
income taxes, id P92,000 for a Type A branch and P38,000 for a Type B branch. Katangalan
will hire no more than 200 employees for the new branch offices and will open no more than
20 branch offices. Linear programming will be used to help decide how many branch offices
should be opened. Katangalan had P10,400,000 in capital available for the new branch
offices.

In a system of equations for a linear programming model, which of the following equations
would not represent constraint?
a. A + B < 20 c. P92,000A + P36,000B < P128,000
b. 20A + 10B < 200 d. P1,300,000A + P670,000B < P10.4M

5. The Kalakian Company makes toys A and B, each of which needs two processes: cutting and
wrapping. The contribution margin is P6 for Product A and P5 for Product B. The table below
shows the maximum number of units (constraint) of each product that may be processed in two
departments.
Maximum Capacities (In Product Units)
CUTTING WRAPPING
Product A 60 80
Product B 60 40

Considering the constraint in processing, which combination of Products Y and Z maximizes

the total contribution margin?
a. 40 units of A and 20 units of B d. 0 units of A and 40 units of B
b. 60 units of A and 0 units of B e. 0 units of A and 60 units of B
c. 80 units of A and 0 units of B

6. In a system of equation for a linear programming model, what can be done to equalize an
inequality such as 6X + 4Y < 30?
a. Nothing c. add padding
b. add a slack variable d. multiply each element by -1

7. A firm must decide the mix of production of Product X and Product Y. There are only two
resources used in the two products, resources A and B. Data related to the two products are
given in the following table:
Product X Product Y
Resource A 3 7
Resource B 2 1
Unit Profit P8 P6

What is the appropriate objective function to maximize profit?

a. 3X + 7Y c. 8X + 6Y
b. 2X + Y d. 5X + 8Y

- END –
MAS 9011 QUANTITATIVE METHODS Page 10 of 12

SELF TEST:

QUANTITATIVE METHODS

1. Hennepin Co. used 30 hours to produce the first batch of units. The second batch took an
additional 18 hours. How many total hours will the first four batches require?
a. 76.8 hours. c. 120.0 hours.
b. 96.2 hours. d. 61.44 hours.

2. Lake Corporation manufactures specialty components for the electronics industry in a highly labor
intensive environment. Are Electronics has asked Lake to bid on a component that Lake made for
Arc last month. The previous order was for 80 units and required 120 hours of direct labor to
manufacture. Arc would now like 240 additional components. Lake experiences an 80% learning
curve on all of its jobs. The number of direct labor hours needed for Lake to complete the 240
additional components is
a. 360.0 b. 187.2 c. 307.2 d. 256.0

3. Morre Company plans to begin production of a new product on July 1. An 80% learning curve is
applicable to Morre’s manufacturing operations. If it is expected to take 1,000 direct labor hours
to produce the first unit, how many direct labor hours should it take to produce the third and
fourth units?
a. 640 b. 960 c. 1,600 d. 2,560

4. Ridgefield, Inc. is considering a three-phase research project. The time estimates for completion
of phase 1 of the project are
Optimistic 4 months
Most likely 8 months
Pessimistic 18 months

Using the program evaluation and review technique (PERT), the expected time for completion of
phase 1 should be
a. 8 months b. 9 months c. 10 months d. 18 months

5. The Sigma Company wants more information on the demand for its products. The following data
are relevant
Units demanded Probability of unit demand
Total cost of units demanded
0 0.10 P0.00
1 0.15 1.00
2 0.20 2.00
3 0.40 3.00
4 0.10 4.00
5 0.05 5.00

What is the total expected value of the total cost of units demanded?
a. P2.40 b. P9.15 c. P9.00 d. P7.40

6. Sampaguita Company is planning to market a new product. The marketing research staff prepared
the following payoff probability distribution giving the relative likelihood of monthly sales volume
levels and the corresponding income (loss) for the new product;
Monthly sales volume Probability Income(loss)
2,500 0.10 P(25,000)
5,000 0.20 7,500
10,000 0.50 37,500
15,000 0.10 50,000
25,000 0.10 75,000

The expected value of the monthly income from the new product:
a. P18,750 b. P22,500 c. P30,250 d. P32,750
MAS 9011 QUANTITATIVE METHODS Page 11 of 12

7. Dough Distributors has decided to increase its daily muffin purchases by 100 boxes. A box of
muffins costs P2 and sells for P3 through regular stores. Any boxes not sold through regular
stores are sold through Dough’s thrift store for P1. Dough assigns the following probabilities to
selling additional boxes:
Additional sales Probability
60 0.6
0.4
100
What is the expected value of Dough’s decision to buy 100 additional boxes of muffins?
a. P28 b. P40 c. P52 d. P68

QUESTIONS 8 AND 9 ARE BASED ON THE FOLLOWING INFORMATION:

Superior Craft is evaluating the launching of a new product. If the product becomes successful,
the present value of future cash flows (excluding investment) is estimated at P2,000,000. If the
product is not successful, the present value of this flow is estimated at P400,000. The required
investment is P1,000,000.

8. What are the probabilities that would have to be assigned to the events “success” and “not
success” to make Superior Craft indifferent between the two actions “invest” and “do not invest”?
a. b. c. d.
Probability of success 37.5% 40% 45.5% 50%
Probability of not success 62.5% 60% 54.5% 50%

9. If Superior Craft thinks the probability of “success” is 60%, how much higher would be the
expected value of the act “invest” over the expected value of the act “do not invest”?
a. P360,000 b. P400,000 c. P600,000 d. P1,000,000

10. Clerks A, B, and C process 50%, 20%, and 30% of the sales orders, respectively. The percentage
of errors made in processing a sales order by Clerks A, B, and C are 2%, 5%, and 10%,
respectively. A sales order is audited and found to be in error. What is the probability that this
invoice was processed by Clerk C?
a. 0.30 b. 0.60 c. 0.10 d. 0.03

11. Bye Co. is considering the sale of banners at the state university football championship game. Bye
could purchase these banners for P.60 each. Unsold banners would be unreturnable and worthless
after the game. Bye would have to rent a booth at the stadium for P250. Bye estimates sales of
500 banners at P2.00 each. If Bye’s prediction proves to be incorrect and only 300 banners were
sold, the cost of this prediction error would be
a. P120 b. P130 c. P170 d. P280

12. Philip Enterprises, distributor of CDs is developing its budgeted cost of goods sold for next year.
Philip has developed the following range of sales estimates and associated probabilities for that
year:
Sales estimates Probability
P 60,000 0.25
P 85,000 0.40
P100,000 0.35

Philip’s cost of goods sold averages 80% of sales. What is the expected value of Philip’s budgeted
cost of goods sold next year?
a. P85,000 b. P84,000 c. P68,000 d. P67,200

13. During the year, Brownout Company experienced the following power outages:
Number of Power Outages Per Month Number of Months
0 3
1 2
2 4
3 3
MAS 9011 QUANTITATIVE METHODS Page 12 of 12

12

Each power outage results in out of pocket costs of P400. For P500 per month, the company can
lease an auxiliary generator to provide power during outages. If the company leases an auxiliary
generator next year, the estimated savings (or additional expenditures) would be
a.(P3,600) c. P1,600
b.(P1,200) d. P1,900

14. The Motion Company has decided to introduce a new product. The company estimates that there
is a 30 percent probability that the product will contribute P700,000 to profits, a 30 percent
probability that it will contribute P200,000, and a 40 percent probability that the contribution will
be a negative P400,000. The expected contribution of the new product is
a. P500,000 c. P166,667
b. P110,000 d. P380,000

ANSWERS

1. A 6. C 11. A
2. B 7. C 12. D
3. B 8. A 13. C
4. B 9. A 14. B
5. A 10. B

☺
– The End –