What Combination of a and B Will Yield the Optimum

question 28

Multiple Choice

What combination of a and b will yield the optimum for this problem?
Maximize $6a + $15b, subject to (1) 4a + 2b < 12 and (2) 5a + 2b < 20 and (3) a, b ≥ 0.

• A) a = 0, b = 0
• B) a = 3, b = 3
• C) a = 0, b = 6
• D) a = 6, b = 0
• E) cannot solve without values for a and b

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Definitions:

Common Stock

Represents ownership shares in a corporation, giving holders voting rights and a share in the company’s profits through dividends.

Goodwill

An intangible asset that represents the excess value paid over the fair market value of an acquired company's net assets.

Equity Method

A financial recording method where investments in other firms are first noted at their purchase price and later modified to reflect the investor's portion of the investee's earnings or losses.

Common Stock

Equity ownership in a corporation, giving holders voting rights and a share of the company’s profits through dividends.