DuLarge Marine Manufactures Diesel Engines for Shrimp Trawlers and Other

question 53

Multiple Choice

DuLarge Marine manufactures diesel engines for shrimp trawlers and other small commercial boats. One of their CNC machines has caused several problems. Over the past 30 weeks, the machine has broken down as indicated below. Each time the machine breaks down, the firm loses an average of $3,000 in time and repair expenses. If preventive maintenance were implemented, it is estimated that an average of only one breakdown per week would occur. The cost of preventive maintenance is $1,000 per week.
$\begin{array}{|l|l|l|l|l|l|}\hline\text { Number of breakdowns per week } & 0 & 1 & 2 & 3 & 4 \\\hline \text { Frequency (Number of weeks that } & & & & &\\\text { breakdowns occurred) }&8&3&5&9&5\\\hline\end{array}$

What is the weekly total maintenance cost of this program?

• A) $1,000
• B) $3,000
• C) $4,000
• D) $6,000
• E) $8,000

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Definitions:

Dividend Payout Ratio

A financial ratio that shows the proportion of earnings a company pays out to shareholders in the form of dividends.

Internal Growth Rate

The growth rate a firm can maintain with only internal financing.

Growth Determinant

A factor that is critical to the expansion of a company or economy, such as technology, capital, and human resources.