1. A toy manufacturing company has a capacity of 500,000 units annually. The fixed cost of the production line is $400,000 per year with a variable cost of $6 per unit and revenues of $9 per unit. The percentage of capacity that must be utilized for the company to breakdown is closest to
2. A specified part can be obtained by either of two methods. Method 1 will have fixed costs of $75,000 per year and a variable cost of $25 per unit. Method 2 will have fixed costs of $90,000 per year and a variable cost of $17 per unit. The number of units that must be produced each year for the two methods to be equally attractive is closest to:
3. Fixed costs for manufacturing a certain product are $100,000 per year. Variable costs are $25 per unit. The product can be purchased from another manufacturer for a flat rate of $48 per unit. The number of units that must be used each year in order for the manufacture and purchase alternatives to breakeven is closest to
4. What are the methods or basic concepts of describing project risk? Explain the definitions and brief ideas of each method (The answer should be between 150-200 words).
5. Why should sensitivity analysis be considered in engineering economic analysis? And what are examples of variables (or parameters) that can have effect on the NPW of variation? (The answer should be between 150-200 words).