Tom and Jerry Have One Day to Work, but Two

question 132

Multiple Choice

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. If Tom divides his time evenly between activities and acts efficiently, he will produce:

• A) 16 chairs and 4 tables.
• B) 12 chairs and 3 tables.
• C) 8 chairs and 2 tables.
• D) 4 chairs and 3 tables.

---

Definitions:

Miller-Orr Model

A financial model used to manage cash balances, determining the optimal point to transfer funds in and out of a non-interest bearing cash account.

Cash Balance Target

A strategy where a company aims to maintain a specific amount of cash on hand to meet operational and emergency needs.

Weekly Interest Rate

An interest rate quoted or applied on a weekly basis, often used in short-term loans or savings accounts to indicate the rate of interest over a week's period.

Marketable Securities

Financial instruments that can be quickly converted to cash at market value.