Case Study Word Problem - "NO Solution??"

J

jerrymc1

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Jul 9, 2011
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The case Problem:
Knowns: 60 minute prepaid phone card is $30.00, Cost is .20 per minute sold, $2.00 setup fee

X=profit per card
X=(rev per crd)-((60*.20)+2)
X= $16.00 per card sold.
THEN
Marketing expense per mailing insert is .04
What is the response rate to break even on mailings.
A given formula which when ran against math help comes back as “NO Solution”
But I was given the answer of (R = .25)???

30 - ((.20*60) + 2 + (.04 / R) = 0
Then the statement was made that the break even point is
1 sale out of 400 is break even.

How do they come up with the R=.25
And
The 1 out 400 = break even.

Thanks for your help.
 
Can't tell what you're asking...you're running all over the place :shock:

16 is revenue from 1 sale.
400 flyers @ .04 = 16.
So if only one of the 400 flyers brings a sale, you break even.
What else are you trying to find?
 
One of the problems is that the formula 30 - ((.20*60) + 2 + (.04 / R) = 0
Does not work for r to = .25. Which is the answer in the Case problem.
When I run this formula thru a math processor - the response is "NO Solution" -

If the formula does not work "Then" how do can you determine that the break even is "1 in 400"?
Even if you assume that the correct value of R=.25

This is my delima.
Thanks Jerry
 
Sorry tried to lay out the facts of the case -
One of the problems is that the formula 30 - ((.20*60) + 2 + (.04 / R) = 0
Does not work for r to = .25. Which is the given answer in the Case problem.
When I run this formula thru a math processor - the response is "NO Solution" -

If the formula does not work "Then" how do can you determine that the break even is "1 in 400"?
Even if you assume that the correct value of R=.25

This is my delima.
Thanks Jerry
 
Ok. I see how the break even is arrive at - That part I now understand.
But still have the problem of how the formula works for R to = .25.
When I run the formular thru a math processor and it returns the response that there is "no solution" for this formula.
30 - ((.20*60) + 2 + (.04 / R) = 0

and the case answer is ".25".
 
jerrymc1 said:
Ok. I see how the break even is arrive at - That part I now understand.
But still have the problem of how the formula works for R to = .25.
When I run the formular thru a math processor and it returns the response that there is "no solution" for this formula.
30 - ((.20*60) + 2 + (.04 / R) = 0

and the case answer is ".25".
Click to expand...

The formula that you wrote does not make sense - mathematically.

You have "unmatched" parenthesis.

If I assume it looks like

30 - [(0.20 * 60) + 2 + (0.04/R)] = 0

then I get,

R = 0.04/16 = 0.0025
 
Thanks for the help - I will bring up this error with the Caser. I drop the ball and lost a couple of the parrens in the cut and paste (I guess). My bad -- Again thanks for the help.
 
Does your 'R' need to be reported as %?

R = 0.0025 = 0.25%
 
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