Question

Industrial-strength conveyor belts are made out of a textile fabric core covered with rubber. Textile fiber strength is crucial for conveyor belt life. Traditionally, "Cotton 7s" yarn was the core. However, the new 750 denier polyester yarn is a potential replacement. If the following data hold, what is the maximum amount a conveyor belt manufacturer would be willing to pay for 750 denier polyester to replace Cotton 7s yarn?- Price of Cotton 7s: $ .90/pound- 750 denier polyester yarn is 4 times stronger than Cotton 7s.- 750 denier polyester yarn requires an extra $ .30/pound in processing costs.

Answer 1

Answer:

The manufacturer must be willing to pay 0.6*4 = 2.4$ per pound

Explanation:

As there is extra processing costs of 0.3$ per pound, that needs to deducted from current Price of Cotton.

So, it comes out to be 0.9 $ per pound - 0.3 $ per pound = 0.6$ per pound

Now, as the Polyester yarn is 4 times stronger, the cost needs to be multiplied by the same factor.

Hence, the manufacturer must be willing to pay 0.6*4 = 2.4$ per pound