Using the Iso-Profit Line Solution Method to Solve a Maximization

question 33

Multiple Choice

Using the iso-profit line solution method to solve a maximization problem requires that we:

• A) find the value of the objective function at the origin.
• B) move the iso-profit line away from the origin until it barely touches some part of the feasible region.
• C) move the iso-cost line to the lowest level that still touches some part of the feasible region.
• D) test the objective function value of every corner point in the feasible region.
• E) none of these

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Definitions:

Receivables

Money owed to a company by its customers or clients for goods or services provided that have not yet been paid for.

Payables

Payables, also known as Accounts Payable, are liabilities of a company that represent money owed to creditors for goods and services received but not yet paid for.

Accrual Basis

An accounting method that records revenues and expenses when they are earned or incurred, regardless of when cash is exchanged.

Net Income

The total earnings of a company after subtracting all expenses, including taxes and interest, from its total revenues.