Dereje Financial mathematics Group Assignment Out of (10%)

1. A retail co. plans to work on a margin of 44% of retail price & to incur other Variable Cost
of 4%. If is expected Fixed cost of Br. 20,000.
a) Find the equation relating Total Cost to sales
Solution Give: FC=20,000
VC= 0.4+0.56 or 0.6
Y= 0.6X +20,000
b) Find the profit if sales are Br. 60,000
Π =TR –TC
=60,000-(0.6x60000+20000)
=60,000-(36000+20000)
=60,000-56000
=4000 birr
c) Find the breakeven revenue
FC 20,
20,000 20,
20,000
BER Or Xe= = = =50,000
1 −m 1−0.6 0 .4
d) If profit is Br. 15,000 what should be the revenue level?
FC+
FC+π 20000+
20000+15,
15,000 35,
35,000
Qin sale = = = =87,500
1 −m 1 −0 . 6 0 .4
2. a) FC=10,500
b) TC = VC(Q)+FC
=0.58x60,000+10,500
= 45,300 birr
𝐹𝐶 10,
10,500 10,
10,500
c) Xe =1−𝑣𝑐 = = = 25,000 birr
1−0.58 0.42

d) 𝜋 = 𝑇𝑅 − 𝑇𝐶
=65,000 – 0.58(65,000)+10,500 =16,800 birr

3) a) A+B+C =37,500
0.08A +0.06B+0.07C =2,800
-B+2C= 0
100(0.08A+0.06B+0.07C =2,800)
8A+6B+7C =280,000
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1 1 1 37,500
8 6 7 280,000 8R1-R2 →R2
0 -1 2 0

1 1 1 37,500
0 2 1 20,000 R2+R3 →R2
0 -1 2 0
1 1 1 37,500
0 1 3 20,000 R1-R2 →R1
0 -1 2 0
1 0 -2 17,500
0 1 3 20,000 R2+R3 →R3
0 -1 2 0
1 0 -2 17,500
1
0 1 3 20,000 R 3 →R 3
5

0 0 5 20,000
1 0 -2 17,500
0 1 3 20,000 R1+2R3 →R1
0 0 1 4,000
1 0 0 25,500
0 1 3 20,000 R2-3R1 →R2
0 0 1 4,000
1 0 0 25,500
0 1 0 8,000
0 0 1 4,000
A=25,500 B= 8,000 C= 4,000
b) A+B+C =40,000
8A+6B+7C=280,000
-B+2C = 0
1 1 1 40,000
8 6 7 280,000 8R1-R2 →R2
0 -1 2 0

2
1 1 1 40,000
0 2 1 40,000 R2+R3 →R2
0 -1 2 0

1 1 1 40,000
0 1 3 40,000 R1-R2 →R1
0 -1 2 0

1 0 -2 0
0 1 3 40,000 R2+R3 →R3
0 -1 2 0
1 0 -2 0
1
0 1 3 40,000 R 3 →R 3
5

0 0 5 40,000
1 0 -2 0
0 1 3 40,000 R1+2R3 →R1
0 0 1 8,000
1 0 0 16,000
0 1 3 40,000 R2-3R3 →R2
0 0 1 8,000
1 0 0 16,000
0 1 0 16,000
0 0 1 8,000
A = 16,000 B= 16,000 C= 8,000
A B total
P 20 10 1200
Q 30 50 950

1
20A+10B =1200
10

30A+50B =950
2A +B =120
3A+5B =95

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2 1 A 120
3 5 B 95
2 1 1 0
3 5 0 1
3 5 0 1
2 1 1 0 R1 <→R2
3 5 0 1
2 1 1 0 R1-R2 →R1
1 4 -1 1
2 1 1 0 2R1-R2 →R2
1 4 -1 1
1
0 7 -3 2 R 2 →R 2
7

1 4 -1 1
−3 2
0 1 R1-4R2 →R1
7 7
5 −1
1 0 7 7
−3 2
0 1 7 7
5 −1
120
7 7
−3 2
95
7 7
5 −1 505
A= 7 x120+ 7 x95 = or 72.14
7
−3 2 −170
B= x120+7 x95 = or -24.286
7 7

5) A B
70% 30%
10% 90%
0.7 0.3
0.1 0.9
A B 0.7 0.3 A B
0.1 0.9
0.7A+0.1B =A
0.3A +0.9B =B
A+B =1 A= 1-B

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0.7(1-B)+0.1B=1-B
0.7-0.7B+0.1B= 1-B
0.7-0.6B=1-B
0.7-1= -B+0.6B
-0.3 = -0.4B
−0.3
B =−0.4 = 0.75 or 75%

A+B=1
A+0.75=1
A= 1 – 0.75
A= 0.25 OR 25%
(0.25 0.75) OR 25% AND 75%
6)
7) X1 =PUSH
X2 =SELFPROPERDOWN
ASSEMBLLY PACKAGE ENGIN
X1 8 2 1
X2 10 4 1

12hr 5 hr 55
12x60 =720min 5x60 =300min
Zmax = 40X1+60X2
8X1+10X2 ≤ 720
2X1+4X2 ≤ 300
X1+X2 ≤ 55
X1,X2 ≥ 0
40X1+60X2+0S1+0S2+0S3
8X1+10X2+1S1+0S2+0S3
2X1+4X2+0S1+1S2+0S3
X1+X2+0S1+0S2+1S3
X1,X2,S1,S2,S3 ≥ 0

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Solution base Cj 40 60 0 0 0 RHSV
X1 X2 S1 S2 S3
S1 0 8 10 1 0 0 720 72
S2 0 2 4 0 1 0 300 75
S3 0 1 1 0 0 1 55 55 Leaving variable

Zj 0 0 0 0 0 0
Cj-Zj 40 60 0 0 0
R2-4R3N →R2
Pivot column R1-10R3N→R1
Solution base Cj 40 60 0 0 0 RHSV
X1 X2 S1 S2 S3
S1 0 -2 0 1 0 -10 170
S2 0 -2 0 0 1 -4 80
X2 60 1 1 0 0 1 55
Zj 60 60 0 0 60 3300
Cj-Zj -20 0 0 -60 0

S1= 170
S2=80
X2=55
Zmax=3300

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 (0.2 0.8) 1 0 1x0.2+0.2x0.8 = 0.36
0.2 0.8 0.2x0+0.8x0.8 =0.64
1st week (0.24 0.64)
The proportion of brand x and their brand user after one week period is expected to be 36%
and 64% respectively. Then the expected user in the 2nd week will be
(0.36 0.64) 1 0 0.36x1+0.64x0.2=0.488
0.2 0.8 0.24x0+0.64x0.8=0.512
(0.368 0.512)
The expected share of brand x and other brand users is 48.8% and 51.2% in the second week.
e) What portion of the market will be using brand x area the end of the season, assuming
the transition matrix remains? Find the steady – state matrix.
N p
(V1 V2) 1 0 = (V1 V2)
0.2 0.8 63223
V1+0.2V2=V1
0 +0.8V2 =V2
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 V1-V1+0.2V2 = 0
0.8V2-V2 = 0
0.2V2=0
V2 = 0
V1=1-V2
V1-0=1
V1= 1
The expected share of brand X and other brand users is 0% and 100% in the second week.
2. Solve the following equation using Gassian method
a) 2x + 3y = 17 2 3 17 1 2 10
X +2y =10 1 2 10 R2 > R1 2 3 17 -2R1+R2→R2
4x +y =19 4 1 19 4 1 19
1 2 10
0 -1 -3 -4R1 +R3 →R3
4 1 19

1 2 10 1 0 4
0 -1 -3 2R2+R1 →R1 0 1 3 X= 4 Y= 3
0 -7 -21 0 0 0

1
b) 17x +3y =5 7 3 5 R1 →R1
7

2x + y =7 2 1 7

3 5
1 -2R1+R2 →R2
7 7

2 1 7

3 5
1 7R2→R2
7 7
1 39
0 7 7

3 5 −3
1 7 7 7
R2+R1 →R1

0 1 39

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 1 0 -16
0 1 39 X = -16 Y = 39
4) Solve the following equation using inverse method.
a) 2X1+2X2+3X3=3 2 2 3 1 0 0 R1—R3 →R1
X2 +X3 = 2 0 1 1 0 1 0
X1+X2 +X3 =4 1 1 1 0 0 1
1 1 2 1 0 -1 1 0 1 1 -1 -1
0 1 1 0 1 0 R1—R2 →R1 0 1 1 0 1 0 R2+R3-->R2
0 0 -1 -1 0 2 0 0 -1 -1 0 2

1 0 1 1 -1 -1
0 1 0 -1 1 2 R1+R3 →R1
0 0 -1 -1 0 2

1 0 0 0 -1 1
0 1 0 -1 1 2
0 0 1 1 0 -2

A-1= 0 -1 1 3 2
-1 1 2 2 = 7
1 0 -2 4 -5
X1= 2 X2= 7 X3 = -5

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