QUESTION 1 Betts Electronics purchases three replacement parts for robotic machines used in its manufacturing process. Information on the price of the replacement parts and the quantity purchased is given below. Price Quantity Part 2000 2016 2000 2016 RC-33 $0.50 $0.60 320 340 SM-14 $1.20 $0.90 110 130 WC-50 $0.85 $1.00 230 250 The Paasche price index for 2016 using 2000 as the base period is equal to ? ?. 106.87 ? ?. 105.91 OC. 106.04 OD. 107.34 ? ?. 98.04
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Step 1: The Paasche price index is calculated as follows: $$Paasche Price Index = \frac{\sum(P_t * Q_t)}{\sum(P_0 * Q_t)} * 100$$ where: * $P_t$ is the price of the item in the current period (2016) * $Q_t$ is the quantity of the item in the current period (2016) * Show more…
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EXAMPLE 11.2-2: The maintenance cost and resale value per year of a machine whose purchase price is $7,000 is given below. TABLE 11.2 Year | Maintenance Cost ($) | Resale Value ($) ---------------------------------------------- 1 | 900 | 4,000 2 | 1,200 | 2,000 3 | 1,600 | 1,200 4 | 2,100 | 600 5 | 2,800 | 500 6 | 3,700 | 400 7 | 4,700 | 400 8 | 5,900 | 400 When should the machine be replaced?
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Q. No.2: Discusses at least five real life applications and importance of Index Numbers The prices and the numbers of various items produced by a small machine and stamping plant are reported below. Use 2000 as the base. Calculate base year weighted and current year weighted index numbers
A machine was purchased one year ago. Presently, the market value is $16,000 and it declines by $3,000 every year. For the next 3 years, the maintenance costs are as follows: Year Maintenance costs 1 $890 2 $1,290 3 $1,690 What is the marginal cost of extending the service for the 3rd year? A. $2,690 B. $5,490 C. $4,690 D. $5,690
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