1. Suppose you are in the marshmallow business! Each marshmallow produced can be sold for $1.25. However,
(a) Profit can increase by contracted help in a factory such that 100 marshmallows can be produced for
$95, and 250 marshmallows can be produced for $200;
(b) The factory has a lease of $1,000,000 at 5% for 30 years;
(c) You want to make $2,000,000 from an account paying 75% compounded weekly for 25 years; and
(d) You want to take 10% of your income to deposit away every month.
Leading Question: How would you represent the above monthly situation?
i. How many marshmallows need to be produced to break-even?
ii. How does the model change from the first month to the second month?
iii. Suppose for the third month, marshmallows are no longer popular, and overtaken by chocolates!
Now, you have considered to sell each marshmallow produced at $1.00, but the contractors are
willing to still produce marshmallows at the same rate. How does your model change for the third
month?