A Candidate Wishes to Use a Combination of Radio and Television

question 87

Multiple Choice

A candidate wishes to use a combination of radio and television advertisements in her campaign. Assume that each 1-minute spot on television reaches to 0.0765 million people and that each 1-minute spot on radio reaches to 0.0045 million. The candidate feels she must reach at least 7.425 million people, and she must buy total of at least 90 minutes of advertisements. How many minutes of each medium should be used to minimize costs if television costs $450 per minute and radio costs $75 per minute? Round your answer to nearest integer if necessary.

• A)Minimum cost is $43,676 with 0 minutes of TV time and 97 minutes of radio time.
• B)Minimum cost is $43,676 with 97 minutes of TV time and 0 minutes of radio time.
• C)Minimum cost is $9,154 with 5 minutes of TV time and 92 minutes of radio time.
• D)Minimum cost is $9,154 with 92 minutes of TV time and 5 minutes of radio time.
• E)Minimum cost is $7,654 with 0 minutes of TV time and 102 minutes of radio time.

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Definitions:

Premium

An amount paid in addition to the standard price or cost, often in exchange for a service, insurance coverage, or higher-quality good.

Bondholders

Individuals or entities that hold debt securities issued by corporations or governmental bodies, expecting interest payments and the return of principal.

Issuing Corporation

A company or entity that offers its securities for sale to investors to raise capital.

Interest Expense

The cost incurred by an entity for borrowed funds, reflected as a charge against earnings on the income statement.