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Charlie Farms raises marine fish for sale in the aquarium trade. Each year, Charlie obtains a batch of approximately 1 million eggs from a local supplier. Charlie's manager is trying to decide whether to use the farms facilities to raise dogfish or catfish. Dogfish eggs cost S6.000 per batch, while catfish eggs cost exist10,000 per batch. Due to differences in needs, only one species may be raised at a time and only one batch of fish can be raised in any 52-week period. With current facilities, approximately 12% of dogfish eggs and 6% of catfish eggs can be successfully raised to maturity. Dogfish take approximately 40 weeks to grow to a saleable size, while catfish take 50 weeks. Catfish also require more care than dogfish. Each week, catfish need two complete water changes and 20 feedings, while dogfish need only one water change and 15 feedings. Each feeding costs exist160 and each water change costs exist800. Heating and lighting costs equal exist300 per week of rearing, regardless of which fish and being raised. Fixed overhead costs for the year amount to exist100,000. Charlie can sell dogfish for exist5 each and catfish for exist12 each. a. Which species should Charlie raise to cam the highest operating income for the year? b. Other than fixed costs, which factors or categories of costs seem to have the greatest influence on operating income? c. Charlies manager is considering the following improvements, each of which will cost an additional exist10,000 for the year. Due to resource limitations, only one can be implemented. Purchasing a higher quality filter material that will significantly improve water conditions in the rearing tanks. The higher water quality will increase the survival rates to 14% for dogfish and 8% for catfish. The need for water changes will also be reduced to one each week for both species of fish. Due to the higher yields, feeding costs will increase to exist160 each. Installing newer, more efficient equipment that will reduce heating and lighting costs to exist200 per week of rearing. The new equipment will promote more stable conditions, increasing the survival rates of dogfish to 12.5% and of catfish to 6.5%. The slight change in survival rates is not expected to increase feeding costs. Using your answers to part b above (with no calculations), which options do you think will be more beneficial? d. Perform the necessary calculations to check if your answer to part c was correct. Should cither of the investments be undertaken, and if so. which fish species should be raised

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