Suppose That a New Alloy Is Invented Which Uses Copper

question 26

Multiple Choice

suppose that a new alloy is invented which uses copper and zinc in fixed proportions where 1 unit of output requires 4 units of copper and 4 units of zinc for each unit of alloy produced.If no other inputs are needed, the price of copper is $5, and the price of zinc is $2, what is the average cost per unit when 2,000 units of the alloy are produced?

• A)$14.25
• B)$.50
• C)$28
• D)$500
• E)$14,250

---

Definitions:

Net Present Value

The calculation used to determine the current value of a series of future cash flows by discounting them at a specific rate.

Cash Inflows

Any money coming into a company from various sources, including sales, financing, and investments.

Investment Proposal

A plan or suggestion put forward for consideration by others, typically involving expenditure on assets in expectation of achieving returns.

Simple Rate of Return

The simple rate of return is a financial metric that calculates the percentage increase or decrease in value of an investment over a specific period.