Suppose a Company Has Estimated That the Marginal Cost of Manufacturing

question 56

Multiple Choice

Suppose a company has estimated that the marginal cost of manufacturing x pairs of a new line of jeans is $c ^ { \prime } ( x ) = 3 + 0.002 x + 0.000006 x ^ { 2 }$ (measured in dollars per pair) with a fixed start-up cost of c(0) = 2000. Find the cost of producing the first 1000 pair of jeans.

• A)$2000
• B)$4000
• C)$6000
• D)$10,000
• E)$3000
• F)$5000
• G)$8000
• H)$15,000

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Definitions:

Semiannually

Occurring twice a year, typically used in the context of payments, interest accruals, or reporting periods.

Effective-interest Method

A method of amortizing bond discounts or premiums that reflects the constant rate of interest over the life of the bond with respect to its carrying value at the beginning of each interest period.

Interest Expense

Represents the cost incurred by an entity for borrowed funds, reflecting the interest payments on debt obligations during a reporting period.

Present Value Factors

These are factors used in financial formulas to determine the present value of future cash flows or income.