Auto dealers have recently been offering “zero percent” financing. A typical plan offers

a potential auto buyer the alternative between choosing a zero percent loan and a rebate on the

car price.

Here’s the way a typical loan works: Josephine Autobuyer is interested in buying a

$20,000 car. The dealer offers Josephine two alternatives:

• She can pay the full manufacturer’s suggested retail price (MSRP) of $20,000 and get a

five-year loan at zero percent loan. There are 60 monthly payments on the loan of

20,000 333.33

60

= ; the loan’s first payment is at the time of the car purchase.

• Josephine can get a $3,000 rebate on the MSRP. In this case, however, she will have to

finance the car at the market interest rate. Current rates on 60-month car loans are 5.9%;

the monthly rate charged on such a loan is 5.9% 0.492%

12

= . A 60-month car loan rate

has payments in month 0 (the time of purchase), and months 1, 2, … , 59.

Your assignment

1. Analyze the two alternatives; which is preferred? Use the following template:

And also if you could explain this as you would put it in a calculator that would be so helpful.

Could you please help these questions in excel and send it to me?

• Attachment 1
• Attachment 2

A Production-Mix ProblemFailsafe Electronics Corporation primarily manufactures four highly technical products,which it supplies to aerospace firms that hold NASA contracts. Each of the products mustpass through the following departments before they are shipped: wiring, drilling, assemblyand inspection. The time requirements in each department (in hours) for each unitproduced and its corresponding profit value are summarized in this table:DEPARTMENTPRODUCTWIRINGDRILLINGASSEMBLYINSPECTIONUNITPROFITX.1201.53$9XM8971.51.0$12TR291$15BR7881.03$11The production time available in each department each month and the minimum monthlyproduction requirement to fulfill contracts are as follows:DEPARTMENTCAPACITYPRODUCTMINIMUM PRODUCTION[HOURS)LEVELWiring1,500XJ201150Drilling2,350XM897100Assembly2,600TR29200Inspection1,200BR706400APPROACH Formulate this production-mix situation as an LP problem. The productionmanager first specifies production levels for each product for the coming month. He lets:X1 = number of units of XJ201 producedX2 = number of units of XM897 producedX3 = number of units of TR29 producedX4 = number of units of BR788 produced