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Practice Question

Posted: Sun Aug 06, 2017 7:45 am
by komal
A project manager needs to develop a web site that allows users to submit expenses. There are two vendors competing for the project. Vendor A proposes an upfront fee of $20,000 and a maintenance fee of $4,000 per month. Vendor B proposes an upfront fee of $10,000 and a maintenance fee of $5,000 per month. Which vendor will be a better choice and after how many months of maintenance?

Vendor A after 10 months of maintenance

Vendor B after 10 months of maintenance

Vendor A after 5 months of maintenance

Vendor B after 5 months of maintenance

Re: Practice Question

Posted: Sun Aug 06, 2017 4:39 pm
by manishpn
komal wrote:A project manager needs to develop a web site that allows users to submit expenses. There are two vendors competing for the project. Vendor A proposes an upfront fee of $20,000 and a maintenance fee of $4,000 per month. Vendor B proposes an upfront fee of $10,000 and a maintenance fee of $5,000 per month. Which vendor will be a better choice and after how many months of maintenance?

Vendor A after 10 months of maintenance

Vendor B after 10 months of maintenance

Vendor A after 5 months of maintenance

Vendor B after 5 months of maintenance



This is a math question and as a practice we encourage student to attempt the math question first , getting a ready answer in math wont help you learn

Re: Practice Question

Posted: Mon Aug 07, 2017 5:04 am
by nazrulq
First it is to find when the time will be equal , Let the number of months are D.

Vendor A

20000 + 4000D

Vendor B

10000+ 5000D

20000 +4000D = 10000+5000D

1000D = 10000
D=10 Months

After 10 months using vendor, A will be profitable for maintenance!