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Paraphin [41]
3 years ago
9

A profit-maximizing decision must be made about whether to keep a bed & breakfast operating. Until the place sells, the mort

gage of $3000/month must be paid, since it is a sunk cost. If the restaurant operates, costs rise by $4000 per month, but revenue will be only $6000 per month. Until the building can be sold,
a.it is best to shut down the bed & breakfast since it is taking a loss.
b.it is best to ignore sunk costs and keep the bed & breakfast operating.
c.it is best to shut down the bed & breakfast even though it is making a profit
d.it is best to keep the bed & breakfast operating because it is profitable.
Business
1 answer:
artcher [175]3 years ago
5 0

Answer:

b.it is best to ignore sunk costs and keep the bed & breakfast operating.

Explanation:

The owner of the store will face the mortgage cost wether the bed and breakfast is open or closed therefore it should be ignore in the short-term for the decision wether or not to keep the business open.

The business revenues are 6,000 while their cost 4,000 thie means there is a contribution of 2,000 then we subtract the mortage to get a loss 1,000

If closed the losses will increase to 3,000 asthe mortage expense would not disappear.

We should keep it open and look for ways to either sale or rent the space for a better gain than 2,000

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3 0
3 years ago
Build an argument for curvilinear effects of a cognitive, social, personality, and motivational attribute on such outcomes. Grou
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5 0
2 years ago
A form that contains charges, DOS, CPT codes, ICD codes, fees, and copayment information is called which of the following?
vlada-n [284]

Answer: <em>Option (a) is correct.</em>

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3 years ago
Cash flows from operating activities are $200,000; cash flows from financing activities are $150,000; capital expenditures are $
irina1246 [14]

Answer:

free cash flow is $90,000

Explanation:

given data

operating activities = $200,000

cash flows from financing activities = $150,000

capital expenditures = $90,000

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solution

we get here free cash flow that is express as

free cash flow = operating activities -  capital expenditures - dividends paid   ..................1

put here value and we get

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2 years ago
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Answer:

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So the more than amount is

= $51,200 - $50,000

= $1,200

3 0
3 years ago
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