2022 (MAY) meofthe Paper: Business Mathematics Nine of the Course: B.Com. (Hons) 13 hours Attempt all questions. Marks are indicated against e Simple calculator is allowed. . 1. A firm purchases two machines at a cost of %31 spectively. Both machines have a useful life of 4 ilues at the end of 4 years. Find the depreciatior ‘ar using matrix notation if: (a) Both machines are depreciated by the straight-line method, (0) Both machines are depreciated by the sum of years digit method, (0) First is depreciated by straight-line method and second by the sum of years digit method. (a) According to straight line method, machines are depreciated by equal amounts each year. Thus, the depreciation of each machine for each year when both are depreciated by straight line method is calculated as _ [31,000 _fiqaia A= [300 and B= [7444] Maximum Marks: 75 ach question. rime 000 and 735,000 years and have zero salvage mn of each machine for each Sol. ion) =| 31-000] [1.1.1.1] _[7,750 7,750 7,750 7,750 *. AB(Amountof Deprecation) = [2 00| (344]-[7 8,750 8,750 | (0) According to the sum of the year’s digit method, the annual depreciation for cach year for the first four years would be in the ratio of 4: 3:2: 1 or 43,2 mal. 10’ 10’ 10 10 Thus, the depreciation of each machine for each year when both are depreciated by the sum of the years digit method is calculated as 31,000] , [4.3 21 A= (ee 00 | B= (i 10 10 | y « ) __[12,400 9,300 6,200 3,100] -. AB (Amount of Deprecation) = 14,000 10,500 7,000 3,500 () The depreciation of each machine for each year when first is depreciated by the straight line method and second by the sum of years digit method is calculated as 31,000 0 _ ise [ 0 ss.00| » [ 7,750 7,750 7,750 7,750 ’. AB (Amount of Deprecation) = [coo 10,500 7,000 3,500 or 5 its of Chemical A, To con rop disease it is necessary to use 12 units o! al A, units echoes B and 15 units of Chemical Sa spray Contains one unit of A, one unit of B and one Sere One barrel of ¢ Spray contains 2 units of A, 6 units of B and 5 units of Oe DATE OF pacer ‘Ontains 3 units of A, 2 units of B and 3 units of C. A Rea a are s of ‘ch spray be used to just meet the requirement, (Solve Py Ma gebra,). 5 237 1 q 4. Jor ae 1 4 ib 07 eyae SHI DAS DELI UNIVERSITY SERIES, Sol, Let x barrels of Py barrels of Q and ¢ barrels of R ate reytirements. Thus. accor Deeded to Ng. 1© given information met the Seca teoyeaels This aystem can be expensed in mui for en vray ial i] \ X= |u| ana [ta] | {is} Aswe know, AN = Vs AB Al = ox 3-5-2003 = (I8 - 10) -2G- 20, = Tea 43005 2436-6)=8 AY! exists, -1*6) < a ae3 Since. Fay 4B = ay 7-200} AA ’ =2eo915 |= 1a)-/3| 2-10 | (3) (3) Ly=tandz=3 ‘Thus, 1 barrel of P, 1 barrel of the requirements. (b) An economy produces only two commodities X and Y. The two commodities serve as intermediate inputs in each other's production. To Produce a unit of X, 0.3 units of X and 0.6 units of Y are needed. Similay to produce a unit of Y, 0.4 units of X and 0.2 units of Y are needed. 4 ani labour days are required to produce and the total value-added. fo3.04] Sol. The input-output matrix is A= [44 09 By Let X= [| be the output matrix required to meet the final demand, D* | Thus, “a Me AXED > IH A)X=D X=(-Ay 1) [0304] [ 07-4) JV AJ = [(0.7)(038)) - [(-04) x (-0.6)] = 0.56 - 0.24 = 032 Qand 3 barrels of R must be used to just meet unit of X and Y respectively. The wit rate is 2250 per labour day. If 240 units and 360 units of X and Y respective! are needed for final consumption, find the gross output levels of thet commodities. Also, calculate the equilibrium prices, total labour require BUSINESS MATHEMATICS 2022 (May) 29 ge |= Al eo. (1- A} exists 1 20] 2 tx aida) *|__1 [0s 04/240] xe Tay v, 032{06 07 | 360. 1 [192184] 1 F996) P50 * 932] 144+ 252] ~ 092) 196|7 42 ‘has, the gross output of the two commodities are 1,050 units and 12375 respectively he equilibrium prices, where wage rate is 7250 per labour day yh Ayr] 1 [08 nef 250 (| (W-AYT pie)" otal o4 oF Lose 1 [08 06) 1,000) 1 F $00 + a = oma{04 07] 1.500] > 032 an =a goods are 75,3125 and 04,531.25 Hence, the equilibrium prices per unit of two respectively ‘Total labour requirement «yl = (1050 1.2375] 2) = (4200 + 7.425) = 111,625) Total value added = (xy) 75) rans ra ~ 11050 1.2375] 19°) = Wosmon0 + 1856250] = (2.906.250) Or Atwo-industry input-output relationship is given below: 7 Industry [Final Demand” Grow Output rt ri 0 0 1 TO a w Labour days | — Using matrix notations, determine: (@) Gross output required to satisfy the new final demand of 90 and 120 units for industry 1 and UI respectively. Also, test the Hawkins-Simon Conditions for the viability ofthe system. (}) Uf labour available is 250 labour days, is the solution feasible? {9 Equilibrium prices ifthe wage rate is %60 per labour day Sol (a) The input-output matrix is [2% 60 aes 200 a0} 1 Let X= [ | be the output matrix required to meet two final demand D= [im] Ten XSAX+D 3 X-AN=D 9 (-AK=D SX (ayoy © 22 Sol. SHIV DAS DELHI UNIVERSITY SERIES wat =[33}-[ For Simon-Hawkins conditions: @ I-AL = Z 0r038>0 and (ii) All the elements of 3 and 2 3 and 2 Hence, f the main di iagonal of leo are positive and less than 1 the conditions are satisfied and mblef matrix (Ay i, the system is viable, ve SYS) ~ Gls 7 = 2 a [00/2) 20 / 300) 1240 20[95] = ua 8) pam Po) = [aay] =20)8 £Y20)_ 207 20667 ap ne [ni] teary [te] ft Yon) af 26) ay The equilibrium pric respectively. {«) Find the dual of the following Linear Programming Problem, Maximize: 2'= 8x, ~ 64, + 7x7 Beg Subject to the constraints: ai + 3% + 6x +x, <40 wx +24 Bess yy = Buy + 7x) ag 60 6x4 25+ are a7 Byte ry aed Maximize: Z = 8x, ~ 6x, +7802 Bay Subject to the constraints: ay tan tent ts 40 “y+ 2ut ant nes 9x, = 54 + 74-1200 = 9x, + 8xy- 74 + x 5-60 > 6x, t 2x5 + 484547 va Ny ny S47 > ry Ay 2AT Let the dual variables be yy, ar Yar Yu and ys respectively, The dual problem is oxy + 2x3 + yy BUSINESS MATHEMATICS 22 gay) 404) + 549 ~ 60y, 4Y; = Yo - 9yy 28; a 811 #32 —7hy 244 29527, of Wy Yo Yee Yq and ys 9 WY = 9 “Fhe dual problem can further Minimiz ‘Subject 2a +47 - ay, +21 +5ys + 6y4— 6ys2 6 Tat ay ty, = ys 22 be reduced to 40v5 + 5p = 60yy +47 401 ~ Ya 95> 8; 3+ 24 + 5y, + 6y 2-6 801 + va Tuy + 2y 27, : Ny ty tty 22 Wr Yo Yo 20 and y is unresttted in sign ec ts | 45 12,00, tarry 2.000 | Let x= y z[ 0 ¥ [30,000 v | Check Points; x+y 30,000 | x2 6,000 ¥5 12,000 ey Os a0mNe [PETA y=0lPutx=0y=0 [Pa =o,y=o 25 80.000(True) | 0% 6.000 Fase) 0 12000 (Trwe)|O'2 9 creec) feasible region is ABCDE, Points| z= 007 pale of z is maximum at ale of q Therefore, =t , the optimal solution at x = £18,000 andDAS DELI UNIVERSITY SERIES, Ae simplex tableau for a maximization type of 4 ® ] 30 | 40 | 35 os near (Gif) Is the solution degenerate? (2) Does the problem hav. () If 5; is the slack in M, B (in hours/ week) an of these machine according to this, (vi) What are the shi (oii) Ifa customer i © alternative solutions? If fachine A (in houry week), 25 id 53 is the slack in machin 40) is Being used to the full 40, show one su of Ban Alternat Sol. Simplex Table sotwion | BP STS ET 40 % gig 35 5 eee oa ° * 6 |=]ol}o Z, B Ts] wo [ss cS —_| Uhm . ( Yes, itis an optimal solution because all entries in C, ~ Z, row are neg i feasible {i> Yes it is feasible stution because optimal solution i always esl UG No, because x one ofthe basic variables has solution value eal 0 () No, it does not have alternatives solution because none of t variable has 0 in C, - Z, row in the final simplex table. ensure x reduction in profit the price of x, should be increased by © {oii x, = 0. 2) = 12, x5 = 21 and Total Profit = 1215, A-company produces three products, P,, and B, and labour L. One unit of produc tnd 3 units of L, while one unit tunits of L. The company has a daily av. and 12 units of L. It is further known t products is 83, €2 and 25 respectively ‘a linear programming problem, product mix. Does the problem have alterna BUSINESS MATHEMATICS —2022 (MAY) 23 Machine A and B are being used to the full capacity because value of slack variables s, and sis zero in the optimal simplex table Shadow prices are: Machine A = 22 per hour; Machine B = &10 per hour; Machine C = Nil “The entry in the G;~ Z; row under 2, is = Co) 5 this means the profit will be reduced by £35 if one unt of x i added tothe solution. Hence, in order to 25, 2 (s) Machine A= " per hour; Machine 8 = 10 per hour, Machine C= Nit (9) Reduction in x, = J *6=2 units; Reduction in x, = 3 «6=5 units Or Py and Py from two raw materials B,, requires one unit of A-3 units Product P requires 2 units each of A and B, of Py needs 2 units of A, 6 units Of B and i ilability of 8 units of A, 12 units of B that the unit contri 4 2 units of L. One unit of tive solution. Let xy 9 and x, be the out Maximum (2) = 3x, + 204 Subject to: 42x, +2r) 58 3h, 425) + 6m 312 Bx, +3x5 + sy 512 Syms? 0 roducing slack variables + 2yt dyes 98 3k + 2+ Gye = 12 2x +3y +4 + So 12 Fea ty 5520 ;Put of products P,, P, and Py respectively +53, : ans Sw 2 and s, we may write the problem as: Basic VariablesBUSINESS MATHEMATICS —2022 (MAY) Simplex Table-tt 248 - rah 22 200 = 100 P= 10 (Ignoring negative value) satin — pe ; Basic Variabie| sotution | | 2 | al For Revenue tobe maximum, £8 = 6p a eas ae ~6(10) = -60 < 0 (-ve) eee eer AU nla y-30™ 300 =O ~ 00-105 = ing is Lat the price where R is maximum. Or A firm has to produce 14,400 units of an item per year. The production cost of each unit is £5 and the carrying cost is estimated to be 10% of the alae ot the average inventory. It costs £25 to make the machine run regardless of the szumber of units produced in a run. Find the economic lot size. If currently, the firm produces in the lots of 1,000 units, find how much can the firm eave if a produces according to the economic lot size. 6 ‘Sol. Let r units be the economic lot size em M4Ao x54 5 «5x 010+ MA , 25 © unit and x3 = 0 unt far non-basie variable hs ‘The alternative solution is given by the following table: €= 72000 + 93 , 3.6.000 Differentiated the above w.rt. x, we get dc 03 _3,60,000 = 05:2 = 720,000 += JLATIOH = 1200 For cost be minimam, £6 (@ 7,20,000 MPa 7 C20 > 0 (ove) optimal solution s Z = Fi, a7 BP units, x= 12 units and x= 0 unit Q. 3. (a) The mana; paperback novel is ger of a bookstore determines that when a certain n# " At x= 1.200, ¢= 72.000 + 93 (1.200) + Priced at » rupees per copy, the daly demand wit! Jy, co aed 7,200. copies. Calculate the elastic of demand ata eee aoe Te mun in cost = 72610-72400 ~ 2 Sol, i A produces according to the economic lot aise {2 At #20, the annual world use of natural gas was s0 toons oye Annual consumption of gs in increasing atthe rate of 10M: contin sume this rate emann the same in future (0. How many (How tong R, Revenue = px ip = 300-32 (300 ~ p2) p = 300 cubic feet will be consumed in the next 10 years from = 07 iI it take to use all the available gas if itis known thos‘world reserves are 2,200 trillion cubic fet that no new discoveries are made)? Sol. The rate of consumption is given by: ft BUSINESS MATHEMATICS—2022 (MAY) 207 the beginning (aun show that the isoquants generated by this production function are aeatively slope 5020101 nee 8 a aK + BL (Total consumption Of as in Rest 0 yooee ie We na oh = Pooer ar = fern = 080 2 : 8103 Cy aK-8 2.200 = |r “raK-# eB pyice a vim, _ gle * 9 met] coe > 2200= Pfomy MRTS = MP” SAfaK-® +L) (Bak: Manatee ayn cam 1) MRI Taking log on both ses, ve gt 1 = 54am Say AMT) log (64) "0.102 loge ee . “1 108 2" = 9 og x an He . = Orton, grasp Mee tbneit igs Een RBS «1686 ye0 ( tenth (8) For a monopolist, the - at epolist, the demand functien is x = 5 & me nis x= F200 F with Mc aK _ =P, _-b(K)"" which is negative. ike rormine ® consumers surpiun at the pics Fh MC = 29 « a ae ar) e Sol. Given. Mc = ‘monopolist wit) 6 Here, x2 = 2,200 - Total Revenue, R Differentiate the Profit is maxinnat 200 + 2a and x= (AIO p = p= 2200-2 SE = 2.200 — 22)x = 2200" — above, MR = 2,200 ~ 4, mm where MR = MC 2,200 ~ 3x? = 200 + 247 . “= 400 ‘Tha, logan are negatively sloped. or A monopolist charges different prices in the two markets where his femand functions are x, = 12- ", and x, 19~ Eh His total com tention 1C=150~+ 120s, where xs the total output. Find the Should charge to maximize his total peak charge in the market having lower Sol. Given. xy = 12 2 andy 2.000 = 8 19 = 205, 2.200 — any = 2.200 400 = 3,800 =p, Second order condition, “OH8) « AOC) ay —. | | and “MC) : tx #20, £ atc) =4@0) 20 and Pp = 1,800 * Consumer Surplus = | D(x ~ sary» [(2.200-%9) ae a0 1800 Prices that the monopolist so ohow that higher pee i oe sic of demand ‘ : 3 7, =190 Sq and P= 380204 As wer ital ene Brig 1 and = 304209 Gwen Gna) les 80, Atx= 20, (MR) = ~6(20) = -120; + Profit is maximum at x; Profit r= Ry + Ry — 15x} + 380%, = 2003 ~ 150 — 20 (y+ ay) = 305, = 60 BE = 380-40%,-129=0 = 40x, = 260 = [2.200% 5 | 35000 [-2n0c2n 29°)" san “t0-A, 52K 2028, ant Bh = a0 =c = 124,000 _ 56090 = 16,000 AC ~ B= (-20)(-40) - (2 = 1,200 > 0 As AC B'> O and both A and C are less than 2er0, ‘mis maximum at x, =_2and P= 180-15) P, = 380 - 20(65) = 250 3 3 (©) Find the elasticity of substitution for the production function: QP = ak + BLDams 12-340 Where fis messur Determine how lon; will be at end of the Sot The number of years the operations should con 12 Syma gen” He ePertons should continues give and C() = 44 pn red in years and 8 she orerations should continue med qn ONS of ry the operat 1d what the tog » Racy 5 tats S002 a t=8 oF ‘The operation should be continued tt 8 years, Now, Total Profits = JiR) —Cyjar forse samen feo anosare fsa * BO) - 3691-1) ~ 20) = 64-4916 mors or eee te Pective prices py and p, are given by: xy = Prot ard am pasdige Find the four partial elasticities of 7 ‘=o, a ae & Spr = 607) pyres» FF = (06) pyinawyer FE = pparasyamess pre(o.4ajarn +7 Elasticity of demand, yy = 28,21 = CO7)p, 705-5, =-07 Elasticity of demand, ny, As Poth ny and ng are ve, th the commer oe cmp Bee PLM OSVeSn9 ian 7 OOS ny = BEB. BEM OA)eOe BUSINESS MATHEMATICS—2022 (MAY) 2-07 and na =-06 wa ies of demand are inde, ect elt B05 ps and nn = Gap, Fe cout price task * (Hence Proved) : es ‘of machinery costs 12,500. The total cost of operations from the B) 4 Parchase toa time fla given by the function st ne eee machine Matter # years the resale value is given by the function gcd one ind Be iovn ce foe the replacement Sf the cane _. = ~ Scrap value Sspreiation = Cost Scrap oF 212,500 - %8,000 + 112 9 ‘pendent of prices. (Hence Proved) ‘ties depend on price of other commodity. 500 + 11 sso 4,500 Average depreciation per year = 4.50012 4,500 yy ‘otal cost of Operation = 9 + 161 ‘Average operation cost per year = 2 +16 <9: 4 46 ‘Average cost of depreciation and operation per year is Here, Cy = Lo - 3 = 2 430 = 20 = 4.500 = pms (= OB as c= 2a0 Fer con fo be minimum C8) = 222 5 9 aye) Thus, C is minimum at ¢ 15 years. Sand hence the optimum time for replacement Or wodity with respect to price is price. Find the deman "wn that the quantity demanded is 5 units at p = 3, Sol, Elasticity of Demand ty The elasticity of demand of a como. ci calculated DH ay- where p is the 'd Function, if it is - wa = Depa te + Fae Using partial fraction: 5=A (2) + B43)Se oy : a DAS DELAL UNIVERSITY states BUSINESS MATHEMATICS 2070 «ayy as omparing the coefficient ofp and constr machine costing 20% higher than the price of the present M respectivel, foranew i er price O=A+B ly, time Gap Wate eon at inking fund is set up. Find what amount should be set aside at the ing of each quarter, out of profits, for the sinking fund, if the fund 5, Tony interest atthe rate of §%6 Pa. compounded quarterly $., i , ‘required in the sinking fung = [Cost of New ]_[Salvage value of 18. sat. amount re Std lace” |-[esnat actine| = Prd + fae oo = 0,000 x 120%) -(@12,000) = te > %1.08,000 - 212,000 = 96,000 FOB +3) + login - 2+ log(y = opty {et be the amount that is set aside a the ‘beginning of each quarter. =3?) = tog) 96000 R[53,-T] "= (64) quarters = 32 Sand p= 3, we ee, 38-2) ¢y t= Lao nd p= 3, eee BD oy of D | t= S = 2% or 002 The demand function ig “B=2) _5 6 OF) 3 2-5. (a) A debt of 26, Row is to be 000 dite ‘ 2 years from no eae Payment of £2099 Now AAA To, ‘Years, and a final. Payment at th . compounded sent i 65 year, settee teem Fg. tan Sol. Let the Final petal. How much isthe may he interest ate mre a the final pa final payment? = : i Ths, Vag nl Payment be tbat ne date be 4 Years hy Pe green st Pose of $500 bond, redeemable atthe end of 10 years at “e000 lt eliations = Vee yp cbligation = pu ctecive, nt PYIME anneal interes a5 the yd eet 00 RE oan. ees pa etective, = 8:00001.1475) + 10,000(0 9335) = 2.000(1.0712) + 5 oop nC 85)22 +2 Sol. Annual Interest of Bon 3 2180 + 9395 = 21424 + 4307 MOET) +2 > 18515 = 64504 7 3 v4 = 5,000» 0.08 = 2200) 200 3, + 550001 + i+ 200 aay + 5.50061 + 0106)0 =200 (="sR] + 5,500(1.06):0 = m0 |G" | samo 0 Purchase Price = = ano (105584) , ~ 20 [9554] « sense = 200 (948) + 0m. = 1472 +302 45432 ee Therefore, the purchase price ofthe Bond is 245432 Tees (0) An asietdeprecistes atthe end of 1% pa. for he Seto yea an Taking | th sides ian, Pa for the next three years, depreaton being calelaed on the cerns Sh coe ave lram reas eee PP Sepreiation andthe depreciated vale ofthe asset af the end oft he ith yee, Sey eto) eee Sol. Depreciation value atthe end of 5 yeat = 45,0001 0107 (1 - 008} ee oer 45,0(081)0.78488) 00257 = 1838318 1 biG O17 = 551% £3 Let re the average rate of depreciation, then (+) Suppose a machine costing £90,000 is to be replaced at the end of 8 ys at which time it wil 45,000(1 - > = 28388:18 ill have a salvage value of 212,000. In order to provide mon’ 5 9 = 0.63073, ffsz SHIV as Deut Taking tog as both sides Jog (~ 9) = log 063073 HIUNIVERSITY series 2023 (MAY-JUNE) e “4 the Paper + Business Mathematics Slog (1~») te.073 ; Sivof Question Paper + 4046 = (== Antitog(-o.04005) = log aye Oovene es of the Course + B.Com (Hons,) (CBCS) = 1-:sosie = On ae © hours "00082 or reign um Marks 2% Attempt All questions. Marks are indicated against ench question. E Use of simple calculator is permitted. 4. (a) A firm has two machines costing %4,50,000 and 23,00,000. Each ine has 5 years’ life with scrap value nil. Find the depreciation of each for each year using matrix notations if (@) Both are depreciation by Sum of the Year’s Digits Method. (i) First is depreciated by Sum of the Year's Digits Method and second by Straight Line Method. 5 Sol, For sum of the years’ digits method, ratio of depreciation for 5 years is 2413:2:1 > um ofthe your’ dighs = 142434445015 wee 4 3 2 1 Depreciation Rate= 35+ 35. 35° G5" 45 : peainc [ 50, 000M 87,368.80, ) Cost = [P72et20(icjfoors Som . - 768.80] 2000+), 1 on om wey ons — |x 0.015 Depreciation Rate=R= [5/15 4/15 3/15 2/15 1/15},.5 = 87,368.80[1 - 0.9145) = jas ] 145] = 87,368.80 « 00855 = e7a70. 0304 Depreciation, D = Cx R= [$30,000 ara al contained in 15% instalment, {3,00,000||35 5 75 75 75| uy inet nine - crm yaw = 387,368.80 - ¢7470 0304 «| S 100000 80000 60000 40000 450000 (0 Now, c= [Shag oo00 ry Depreaton Rate = R= [3 AS yas As as UB) Dorin =F (03% sob YE VEE YE) omen (808 ED OE ST Or me254m Shiv PELIMUNIVERSITY states, A firm produces three My, M; and M, be Of P3 oF 75 units of er hour. My can BUSINESS MATHEMATICS —2023 (MAY-JUNE) i 255 Products, Py, Py a and ys be the dual variables, rb an aE yy, Laguna tl ras Pee How. Mz can pe PrOeeSS 25 unite ot Py or atkins Cairne: y23 25 oF 100 uni wri any one Wt Yat ys24 ne ’, y+ a+ 27 Products can be produced ¢2: USN ni Yi Ye 2 0; ys untesticted in sign Sol. See Q. 150), Unit 1 Per day. ' of thn company produces two types of leather bets Type A and Type B. The (0) AR economy consists of two bation to proft per belt is 28 for ‘Type A and 2% for Type B. The time Produce one unit of me facturing ourpayrntcturng ang agrical 28 1D ments of one belt of Type A and Type B are in the ratio of 2: 3. Time eae enit of agricultural goody Be CUPL, 0 unit altar i of Type A. The leather is sufficient output req ng nf solve it by simplex method. ic by simp! fal ion units of million, “ee of ta oS Sal Let and x be the number of Type A and Type B leather belts respectively Tee the wage rte ie lta goods eon ST 2nufacturing MP ypximise Z = 8x) + Gx, A 0 ‘or final consume ited to produce, a belt is 2 of manufacturing and agricultural ‘an-hour, calculate the equilibe If time required to produce, is a8 2019 (May Units then total time available for the production of belts is 500 * 2 = 1000 units 2x, + 3x) < 1000 xy tr, £400 x, $200 950 Introducing slack variables $,, Sy and S, Maximise Z 8x + 6x, + 05; + 05, + 08, Subject to: 2x, +3ey +5, = 1000 - mtxy #8) = 400 mary Input | => 34 +55 = 200 {), Write the technoiogy maui —-— SO extable (®) Rewrite the new transact, " ce _ Simplex Tablet ion matrix whe 5a sot see er Sst increases to 23 units 1y7 | EERE Esl PAE . +) (a), 2019 (Ma pS A o 3 | 2 | —- | + $+ o | { —"- 5 7 ° | 1 [olelola - UPageae fF —\ — T [eee pe pao Or — eet opoyo | Write the dual of the following linear programming problem: \ | 4 eal | Minimize: 23x ro |__| suitoning| | |_| — Subject to: x, +x, + 2x, < 10 ‘Applying RR; - R 4x, - 2215 x+y 4x3 =17 Ro RR, Myx %520256 M Shiv Das DELHI UNIVERSITY ste BUSINESS MATHEMATICS 2023 (MAY-JUNE) 1257 Simplex Table 1 Complete the table and test wheth er solution is optimal or not, find jout the optimal solution, {s the solution feasible? sit a case of multiple solutions? solution degenerate? ip) Write the optimal product mix a ind the profit contribution shown by the above solution. Which resources are fully utilized and which are not and to what (eet? _ (eif) What are the shadow prices of the three resources? (oii) Ifthe capacity is to be expanded, i, which of the three resources should ‘be given priority? (ia) Ifa custome is Prepared to pay hi price for product X;, how much Profit remains unchanged? 12 should the price be increased so that Complete Simplex maximum at x, = 200; x Solution is degenerate. (9 Yes, The solution is optimal as all the v alues in C,~ Z, row are either OF negative (-ve), ) Yes, the solution is feasible as all the basic variables take a positive value and no artificial variables are (it) Weis not a case of multiple have a zero value in the C, (ie) Solution is not d values in the solu % + X+X3 < 100 0X, + 4X5 + 5X, < 600 2G + 2X, + 6X, < 300 present in the final table legenerate because basic variables do not hav tion cokumn (Xs) An incomplete table is given below: (©) The Optimal Product Mix, x; = 11070 x 640K = (0) Resources represnted by slack variables $) and S4 ate fully utilised whereas resource represented by Slack variable 8 not fully tise to the estent of 100 unt . (oy Shadow Prices ae § + 12:5)" 2 and, =0258 W Shiv Dac DELIM UNIVERSITY SEES (il) Resource I should be given pioiy a8 thas them relating to the resource iv, BUSINESS MATHEMATICS ~2023 (MAY-JUNE) 259 215 ot" 150 Pott remains unchang sould be inreased by ¢8 change ER 2 450 <0. atu cl eB 08 comedy Wester nd scape, OA 9K “Stonbenween Cand nthe fora comma eh hn, Ae : () Find the behaviour of marginal product of each factor. (i What is the nature of returns to scale? ii) What isthe total reward of labour and capital if each factor is paid on rice equal to its marginal product increases. ° sot. For () & Ui, See Q.7. Unit 3 IPage 45 = (22) .sag(tem, © Da RKB = Last19 19 KOU KAI Differentiating abo re) K = 1812/9 KV3 49123 KW W AbOVE Winks we get peel MC = HC of 24796045) -(02 70) * aaa which shows that the total product is exhausted. Or Find the marginal rate of technical substitution and the elasticity of substitution for the following production function: x= (UK) = [ake + (1a) P00 where x is the total output obtained by using 1 and k units of labour and capital respectively. +10) ‘Ans. See Q. 12, Unit 3 Lea | Now, Lec) ~ of _-20 ] (9 The supply curve for a commodit units. Find producer's surplus. Can Sol. Given, {Page 48 ity is p= V9=x and the quantity sold is 3] |. Les8 | sae? Hence, MC falls continuously as ‘you find consumer's surplus? 6 Pee VOn7 =I = 4 *: Producer's Surplus, PS = pat, - {stds the output increases, Producers Sup a ee he change a CURB 26,00 fora tlevision st on ores of 5 oles ae 51M) [Sara 28 LEosaye|, ae 50 args is reduced on every set by 75 per et for enue ordered in exces 2 2 Of 50. Find the largest size order the company should allow so as to receive 728 - 3[09-9)"2] = 28 - 2 f64 - 271 maximum revenue. ‘ 0 Sol. Let x be the number of sets ordered in excess of 50. = 3-3 SCH 3 ota o. of sets ordered is 50+ x, The charge is reduced by 875 pr st for exh function isnot given, therefore we cannot determine consumer's set ordered in excess of 50. Thus, new charge is 6000 - 75x, es " R = (Order size) (Charge per set) or 50 + x) (6000 ~ 75x) = 3,00,000 - 75:2 + 6.000% - 3,750 ‘The price elasticity of demand for a commodity is 3,00,000 + 2,250x - 7512 3 2 5 ne* GHG ‘x 72.250 -150x For R to be maximum, 4 = 9 Find the corresponding demand function if quantity demanded is 8 units ‘When the price is 22 = 2,250 - 150x = 0 6 ‘Ans. See Q. 14, Unit 3 {Page 4? gg260 M Shiv Das DELI UNIVERSITY SEES, Q. 4. (a) A piece of machinery costs €1: BUSINESS MATHEMATICS — 2023 (MAY-JUNE) #1 261 the time of purchase upto a time tis gi 2000. Th ot 2 ope" ana cos of operat ven by the fun. ee aion a fro C29 years [ Qafind the optimum time for replacement of gov" BY the fang Or Seb Se 0-30, 209 May, cone Ip “ the demand curve aQ + bP - K=0, where a, b and K are positive constants. or age 214 for Produces two commodities x respectively, Ass ve mine the price elasticity of demand when marginal revenue is zero. 6 gol. Given. Demand Curve: aQ + EP - K=0 Price P= E58 ° rium levels of its roduct ic et cee! - ane Sol. Given, Price of commodity, eroget® Which may Ores ca Price of commodity, x; = 18 7 e Here, R = 12X, *18X) and TC = ( Profit function, P= Re Ce ings niat MGS 2K2 “Ro “nn wr. H+ 2-4 -x, Put £ 0; = K=xQ : @ 5 70; 18-X - 4x. Solving () and (i), we get X= Zand xX,=4 od : ow, 2. - e Now, wt ay Now, Hasty Daman = 2 Since AC ~ B= (4) (4) - (yea t6 4 Keak) K-5 Kya 1 {From (i) fs AC — B?>Oand A=~4<0. As second “ 2 Kijak?” _ af B2> 0a As second order condition i * joint profit is maximised at X, = 2 and Xy “onton is satis tha, (b) A company developed a vi machinery can be delivered i ‘Demand has unit elasticity when MR = 0 al in Delhi at a price of 299, Savings is given by the functi Q.5. Attempt any three: 5x3 00. The rate a cox 0) Me.X deposited £1000 in a bank fr 3 years, offering interest at 2 lon ft) = 500082, 0.< t< 15here t represen ax tle of 6% compounded half-yearly during the first year, at the rate of Love and fl) represents savings in rupecs as eve ct inwoducing new machine [ sompounded quarterly during the sean nex in #8 year. How many years of normal operation ca it take to pay forthe cost of machine? and at 10% compounded continuously during third year. Find his balance after 3 years, {0) An asst costing %4300 will depreciate to a scrap value of t500 in 10 years, Find the rate of depreciation, {0 A loan of €30,000 atthe interest rate of 6% compounded annually isto be Amortized by equal payments at the end of each year for 5 years res () The size of each annual payment; (G) The principal outstanding at beginning of at year: (Gi) Interest in at ‘ Sol. Let x years of normal operation is required to Pay forthe cost of machine [F(a = 90,000 = fs,0002) = 90,000 payment 5,000; -e (io) Principal contained in payment and = 90,000 = $000 (0) Total interest pai. 32 (a) Machine A cots £10900 and has a useful lite of 8 years. Machine B costs 90,900 = 1.000529 5,000 and has a useful life of 6 years. Suppose machine A generates ny neon , 3 labour savings of £2,000 while machis = 2.70,000 = 10,000 (2/2) > 7-372 ine B generates an annual labour savings of €7,800. Assuming the time value of money is 10% per annum, find which > 72 Qs ‘machine is preferable?262 @ Shiv Das DELHI UNIVERSITY SERIES, (6) A debt of £5,000 due 5 years from now and %5,000 is to be repaid by a payment of %2,000 due 4 years and a final payment at the end compounded annually, due 10 years fro, m ; . 2 years, a Payment of z, id of 6 years. If the i ‘ how much is the final payment? "et Fate is 79, Sol. (a) For First year, i= °% = 0.03, 1 =1(2) = 2 0). For Second year, j= 912 4 = 9.03,n=1(4) = 4 For Third year, i = 0.10, Required balance after 3 = = 10,000 (1.03) oan 10,000(1+ 0,03)2 (1 + 0.03)4.¢0.10 = 10,000 (1.03)6 ¢0.10 = 10,000 (1.1940) (1.1052) = (b) See Q. 8, Unit 4, there]! 734 Of interoay "= 90. of periods 213,196.09 [Page 72 © @ The size of each annual payment, R = Here, 9. - [He] fn Fi ~where[n = 5; = 096 a. =| L=(1+0.06)5] _ 1-(1.96)-5 tam =[ O50" | | 1 (1.06) 1-0.747 _ 0.253 0.06 “O06 * Gog = 4217 °7114.062 (i) Principal outstanding at the be = Rasy = sinning of 4% year, Ra 5-FTlo0s = Rago, = 11+0.06)2 _ 1-(0.06)? _ 1-0889 _ oan _ Here, asiygs = 006 006 ~ 0.06 = 006 = 285 = 7114.062 x 1.85 = 13161.015 (approx) +-[R = 7114.062 From Part (c) point (i) (iii) Interest in 4th payment = iRa,-), = 0.06 (131610.15) = 7789.66 (iv) Principal contained in 4th payment = Principal oustanding at the beginning of the 4 year ~ Interest in 4* payment = %7114.062 - 7789.66 = %6324.402 [From Part (c) point (ii) & (ii?) (2) Total interest paid = nR - P = 5 x 7114,062 - 230,000 = Couey (d) See Q. 13, Unit 4. (rage a (e) See Q. 40, Unit 4. [Pag {From Part (¢) point (i) gaud