ISYE 6644 OH Exam 1 Solutions – Spring
2026 Georgia Institute of Technology
Question 1: A company has 1000 employees. The company has a 5% annual salary increase. If the
average current salary is $45,000, what is the total salary of the company after the increase?
A) $47,250,000
B) $45,000,000
C) $47,250
D) $50,000,000
Answer: A) $47,250,000
Rationale: Current total salary = 1000 × $45,000 = $45,000,000. After 5% increase: $45,000,000 × 1.05 =
$47,250,000. Option B is the current total without increase. Option C is the per-employee increase
amount. Option D represents an 11.1% increase, which is incorrect.
Question 2: A manufacturing process produces 500 units per hour. If efficiency improves by 8%, how
many units will be produced in a 10-hour shift?
A) 5,400
B) 5,000
C) 4,600
D) 5,800
,Answer: A) 5,400
Rationale: Current production per 10 hours = 500 × 10 = 5,000 units. With 8% improvement: 5,000 ×
1.08 = 5,400 units. Option B is without improvement. Option C reflects a decrease. Option D reflects a
16% increase, which is double the actual improvement rate.
Question 3: A project has an initial cost of $120,000 and annual savings of $25,000. What is the payback
period in years?
A) 4.8 years
B) 5.0 years
C) 3.6 years
D) 6.0 years
Answer: A) 4.8 years
Rationale: Payback period = Initial cost / Annual savings = $120,000 / $25,000 = 4.8 years. Option B is if
we approximated to 5 years. Option C is an incorrect calculation using a different denominator. Option D
is a miscalculation.
Question 4: A factory produces 2,000 units per day. If demand increases by 15%, what is the new daily
production requirement?
A) 2,300 units
B) 2,150 units
C) 2,000 units
D) 1,700 units
Answer: A) 2,300 units
,Rationale: New requirement = 2,000 × 1.15 = 2,300 units. Option B represents a 7.5% increase. Option C
is the original amount. Option D reflects a decrease.
Question 5: A company has 1000 employees. The company has a 5% annual salary increase. What is the
total salary of the company after the increase, if the average salary is $50,000?
A) $52,500,000
B) $50,000,000
C) $55,000,000
D) $47,500,000
Answer: A) $52,500,000
Rationale: Current total = 1000 × $50,000 = $50,000,000. After 5% increase: $50,000,000 × 1.05 =
$52,500,000. Option B is the current total. Option C represents a 10% increase. Option D is a decrease.
Question 6: An investment grows at 6% compounded annually. If $10,000 is invested, what is the value
after 3 years?
A) $11,910.16
B) $11,800.00
C) $10,600.00
D) $12,000.00
Answer: A) $11,910.16
Rationale: Future value = $10,000 × (1.06)^3 = $10,000 × 1.191016 = $11,910.16. Option B is simple
interest at 6% for 3 years. Option C is only one year's growth. Option D is an overestimate.
Question 7: A company sells 1,500 units at $80 each. If the cost per unit is $55, what is the total profit?
, A) $37,500
B) $120,000
C) $82,500
D) $50,000
Answer: A) $37,500
Rationale: Revenue = 1,500 × $80 = $120,000. Cost = 1,500 × $55 = $82,500. Profit = $120,000 - $82,500
= $37,500. Option B is revenue only. Option C is cost only. Option D is a miscalculation.
Question 8: A machine depreciates at 10% per year. If its initial value is $80,000, what is its value after 2
years?
A) $64,800
B) $72,000
C) $64,000
D) $70,000
Answer: A) $64,800
Rationale: After year 1: $80,000 × 0.90 = $72,000. After year 2: $72,000 × 0.90 = $64,800. Option B is
after only 1 year. Option C is a straight-line depreciation of 10% per year for 2 years from the original
value. Option D is an incorrect calculation.
Question 9: A company has fixed costs of $50,000 and variable costs of $30 per unit. If they sell 2,000
units at $50 each, what is the break-even point in units?
A) 2,500 units
B) 1,667 units
2026 Georgia Institute of Technology
Question 1: A company has 1000 employees. The company has a 5% annual salary increase. If the
average current salary is $45,000, what is the total salary of the company after the increase?
A) $47,250,000
B) $45,000,000
C) $47,250
D) $50,000,000
Answer: A) $47,250,000
Rationale: Current total salary = 1000 × $45,000 = $45,000,000. After 5% increase: $45,000,000 × 1.05 =
$47,250,000. Option B is the current total without increase. Option C is the per-employee increase
amount. Option D represents an 11.1% increase, which is incorrect.
Question 2: A manufacturing process produces 500 units per hour. If efficiency improves by 8%, how
many units will be produced in a 10-hour shift?
A) 5,400
B) 5,000
C) 4,600
D) 5,800
,Answer: A) 5,400
Rationale: Current production per 10 hours = 500 × 10 = 5,000 units. With 8% improvement: 5,000 ×
1.08 = 5,400 units. Option B is without improvement. Option C reflects a decrease. Option D reflects a
16% increase, which is double the actual improvement rate.
Question 3: A project has an initial cost of $120,000 and annual savings of $25,000. What is the payback
period in years?
A) 4.8 years
B) 5.0 years
C) 3.6 years
D) 6.0 years
Answer: A) 4.8 years
Rationale: Payback period = Initial cost / Annual savings = $120,000 / $25,000 = 4.8 years. Option B is if
we approximated to 5 years. Option C is an incorrect calculation using a different denominator. Option D
is a miscalculation.
Question 4: A factory produces 2,000 units per day. If demand increases by 15%, what is the new daily
production requirement?
A) 2,300 units
B) 2,150 units
C) 2,000 units
D) 1,700 units
Answer: A) 2,300 units
,Rationale: New requirement = 2,000 × 1.15 = 2,300 units. Option B represents a 7.5% increase. Option C
is the original amount. Option D reflects a decrease.
Question 5: A company has 1000 employees. The company has a 5% annual salary increase. What is the
total salary of the company after the increase, if the average salary is $50,000?
A) $52,500,000
B) $50,000,000
C) $55,000,000
D) $47,500,000
Answer: A) $52,500,000
Rationale: Current total = 1000 × $50,000 = $50,000,000. After 5% increase: $50,000,000 × 1.05 =
$52,500,000. Option B is the current total. Option C represents a 10% increase. Option D is a decrease.
Question 6: An investment grows at 6% compounded annually. If $10,000 is invested, what is the value
after 3 years?
A) $11,910.16
B) $11,800.00
C) $10,600.00
D) $12,000.00
Answer: A) $11,910.16
Rationale: Future value = $10,000 × (1.06)^3 = $10,000 × 1.191016 = $11,910.16. Option B is simple
interest at 6% for 3 years. Option C is only one year's growth. Option D is an overestimate.
Question 7: A company sells 1,500 units at $80 each. If the cost per unit is $55, what is the total profit?
, A) $37,500
B) $120,000
C) $82,500
D) $50,000
Answer: A) $37,500
Rationale: Revenue = 1,500 × $80 = $120,000. Cost = 1,500 × $55 = $82,500. Profit = $120,000 - $82,500
= $37,500. Option B is revenue only. Option C is cost only. Option D is a miscalculation.
Question 8: A machine depreciates at 10% per year. If its initial value is $80,000, what is its value after 2
years?
A) $64,800
B) $72,000
C) $64,000
D) $70,000
Answer: A) $64,800
Rationale: After year 1: $80,000 × 0.90 = $72,000. After year 2: $72,000 × 0.90 = $64,800. Option B is
after only 1 year. Option C is a straight-line depreciation of 10% per year for 2 years from the original
value. Option D is an incorrect calculation.
Question 9: A company has fixed costs of $50,000 and variable costs of $30 per unit. If they sell 2,000
units at $50 each, what is the break-even point in units?
A) 2,500 units
B) 1,667 units
