A Linear Programming Problem Has the Following Objective Function

question 28

Multiple Choice

A linear programming problem has the following objective function:
20A + 40B + 60C
If the optimal solution provided by the model is to produce and sell 100, 200, and 300 units of A, B, and C, respectively, what is the expected profit?

• A)£36,000
• B)£120
• C)£24,000
• D)£28,000

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Definitions:

Depreciation Expense

An accounting method of allocating the cost of a tangible asset over its useful life to account for declines in value over time.

Residual Value Guarantee

A commitment to ensure that an asset will have a specified value at the end of its lease term.

Present Value

The present value of a future amount of money or series of cash flows, calculated using a given interest rate.

Minimum Lease Payments

The lowest amount that a lessee is expected to pay over the lease term for the right to use an asset.