A Farmer Plans to Plant Two Crops, a and B

question 155

Multiple Choice

A farmer plans to plant two crops, A and B. The cost of cultivating crop A is $40/acre, whereas that of crop B is $60/acre. The farmer has a maximum of $7,400 available for land cultivation. Each acre of crop A requires 20 labor-hours, and each acre of crop B requires 25 labor-hours. The farmer has a maximum of 3,300 labor-hours available. If he expects to make a profit of $220/acre on crop A and $280/acre on crop B, how many acres of each crop should he plant in order to maximize his profit?

• A) 80 acres of crop A, 65 acres of crop B; optimal profit $44,200
• B) 0 acres of crop A, 124 acres of crop B; optimal profit $34,720
• C) 65 acres of crop A, 80 acres of crop B; optimal profit $36,700
• D) 165 acres of crop A, 0 acres of crop B; optimal profit $36,300

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Definitions:

Flotation Costs

Flotation costs are the expenses incurred by a company in issuing new securities, including underwriting fees, legal fees, and registration fees.

Dividend Policy

A dividend policy is a company's approach to distributing profits back to its shareholders, either in the form of cash dividends or stock dividends.

New Shares

These are additional shares of stock issued by a company, expanding the total number of shares on the market and diluting existing shareholders' ownership unless they purchase more.

Shareholders of Record

Individuals or entities that are officially registered and listed as the owners of shares in a company as of the record date.