Question

A manager has up to $190,000 available to invest in new construction equipment for the company. The manager must purchase a new dump truck and does not have a need for a second dump truck. The dumping trailer can only be purchased along with a dump truck. From the following list of possible equipment, identify all of the mutually exclusive alternatives and identify which of the alternatives are not acceptable.

No. Description Cost ($)
1 Loader 125,000
2 Dump Truck 170,000
3 Dump Truck 265,000
4 Dumping Trailer for the Dump Truck 25,000

Answer 1

a. Mutually exclusive alternatives are

No. Description Cost ($)

2 Dump Truck 170,000

3 Dump Truck 265,000

b. The alternatives that are not acceptable are:

No. Description Cost ($)

1 Loader 125,000

4 Dumping Trailer for the Dump Truck 25,000

Step-by-step explanation:

a. Mutually exclusive alternatives imply alternatives that cannot occur together. In relation to this question, since the manager must purchase a new dump truck and does not have a need for a second dump truck, that means that two trucks are mutually exclusive. Therefore, mutually exclusive alternatives are

No. Description Cost ($)

2 Dump Truck 170,000

3 Dump Truck 265,000

b. Alternative are not acceptable if they do not meet the conditioned specified. In relation to this question, since the dumping trailer can only be purchased along with a dump truck it means that Dumping Trailer for the Dump Truck is not acceptable. Also, since Loader is not a trcuk, that means it is not also acceptable. Therefore, the alternatives that are not acceptable are:

No. Description Cost ($)

1 Loader 125,000

4 Dumping Trailer for the Dump Truck 25,000