Ali is a student at the University. He recently purchased a car for OMR5,000 to use it for going to the University. Ali also expects that other friends might ask for transportation from him. He expects a total monthly revenue of OMR60. He expects fuel cost to be OMR30 per month. One of Ali's friends is a taxi driver. He offered Al to take him to University for a monthly fee of OMR10. Because he does not have to drive, Ali believes that he can perform online work that would earn him a monthly revenue of OMR10. What is the differential cost in this scenario? Select one: O a. OMR50 O b. OMR10 O c OMR40 O d. OMR20 Oe. OMRB
Ali is a student at the University. He recently purchased a car for OMR5,000 to use it for going to the University. Ali also expects that other friends might ask for transportation from him. He expects a total monthly revenue of OMR60. He expects fuel cost to be OMR30 per month. One of Ali's friends is a taxi driver. He offered Al to take him to University for a monthly fee of OMR10. Because he does not have to drive, Ali believes that he can perform online work that would earn him a monthly revenue of OMR10. What is the differential cost in this scenario? Select one: O a. OMR50 O b. OMR10 O c OMR40 O d. OMR20 Oe. OMRB
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Ali is a student at the University. He recently purchased a car for OMRS,000 to use it for going to the University. Ali also expects that other friends might ask for
transportation from him. He expects a total monthly revenue of OMR60. He expects fuel cost to be OMR30 per month. One of Ali's friends is a taxi driver. He offered Ala
to take him to University for a monthly fee of OMR10. Because he does not have to drive, Ali believes that he can perform online work that would earn him a monthly
revenue of OMR10. What is the differential cost in this scenario?
Select one:
O a. OMR50
Ob.OMR1O
OCOMR4O
O d. OMR2O
Oe. OMRBO
Expert Solution
Step 1
Definition:
Differential analysis: Differential analysis refers to the analysis of differential revenue that could be gained or differential cost that could be incurred from the available alternative options of business by leaving out irrelevant information.
Step 2
Identify the correct option:
From the above calculation, it is clear that option d is the correct answer.
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