The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. He figures it will cost an additional $100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood for $125.
a) What would the potential profit be if he were to split 4,000 cords of wood with this machine?
b) How many cords of wood would he have to split with this machine to break even?
c) How many cords of wood would he have to split with this machine to make a profit of $30,000?
d) If, for this machine, design capacity is 50 cords per day, effective capacity is 40 cords per day, and actual output is anticipated to be 35 cords per day, what would be its utilization?
e) If, for this machine, design capacity is 50 cords per day, effective capacity is 40 cords per day, and actual output is expected to be 32 cords per day, what would be its efficiency?