1. **Tech Engineering Inc. Break-even and Production Range Analysis**

- Determine the breakeven production quantity per year for the current process if the selling price per unit is $40 at all production levels.
**Answer:** 5,200 units

- Suppose Tech Engineering can switch to a new production process with a fixed cost per year of $110,000 and a variable cost per unit of $20. The selling price per unit will not be affected. For what range of production would the new process be preferred over the current process?
**Answer:** The new process would be preferred for the production range 0–4,000 units.

2. **New Company Profit Analysis**

- A new company has developed a new product. The material cost is estimated at $53 per unit. Labor to manufacture each unit is estimated at $20. Utilities have been estimated at $800 per month, and rent at the production facility will be $5,000 per month. Assume the company must pay a tax of $5 per unit sold. How many units must be sold to make a profit of $8,000 each month assuming they are priced at $100 each?
**Answer:** 628 units

3. **Substation Cost Estimation**

- A 21-kW substation was built in County A, Texas, for 1.4 million dollars in 2015. The same substation would cost 1.6 million to build in 2022. County B, a neighboring county, wants to build an 18-kW substation in 2022. Assume a power sizing exponent of 0.85 and estimate the cost of construction for the 18-kW substation.
**Answer:** $1.4 million

4. **Bakery Apprentice Decision**

- The owner of a bakery is thinking about expanding its business and starting to sell cakes. Two applicants are being evaluated. Applicant A can make one cake in 100 minutes and has a learning rate of 95%. Applicant B can make one cake in 120 minutes and has a learning rate of 92%. An apprentice is considered to reach their maximum proficiency by the time they make their 5,000th cake. Which applicant should the bakery hire?
**Answer:** Applicant B, because he will make his 5,000th cake in 43 minutes versus 53.24 minutes for Applicant A.

5. **Loan Comparison**

- Suppose you are choosing between two loans. Loan A has a nominal rate of 8.9% compounded quarterly. Loan B offers a nominal rate of 8.7% that is continuously compounded. Determine which loan is the best for you and state why.
**Answer:** You should choose Loan B over Loan A, as Loan B has an effective interest rate of 9.1%, and Loan A has an effective interest rate of 9.2%.

6. **Investment Option Analysis**

- You want to invest your $5,000 starting bonus for at least five years. Which one of the following financing options would give you the greatest return on your investment over five years?
- 7.98% per year compounded semiannually.
- 7.90% per year compounded quarterly.
- 7.80% per year compounded daily.
- 7.82% per year compounded weekly (52 weeks per year).
- 7.86% per year compounded monthly.
- **Answer:** 7.86% per year compounded monthly.

7. **Cash Flow Diagram Analysis**

- Calculate the value of D so the cash flow diagram has a present value of 0 at a 10% interest rate (you must use gradient).