Gateway Tours is choosing between two bus models. One is more expensive to purchase and maintain but lasts much longer than the other. Gateway's discount rate is 10.9%. The company plans to continue with one of the two models for the foreseeable future. Based on the costs of each shown here, which should it choose? (Note: dollar amounts are in thousands.) Based on the costs of each model, which should it choose? (Select the best choice below.) OA. Gateway Tours should choose Short and Sweet because the NPV of its costs is smaller. OB. Gateway Tours should choose Old Reliable because it lasts longer. C. Gateway Tours should choose Short and Sweet because the equivalent annual annuity of its costs is smaller. OD. Gateway Tours should choose Old Reliable because the equivalent annual annuity of its costs is smaller. Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Model Year 0 Year 1 Year 2 Year 3 Old Reliable - $201 - $3.9 - $3.9 -$3.9 Year 4 - $3.9 Year 5 - $3.9 Year 6 $3.9 Year 7 - $3.9 Short and Sweet -$100 -$2.2 - $2.2 -$2.2 $2.2 Print Done ×

Gateway Tours is choosing between two bus models. One is more expensive to purchase and maintain but lasts much longer than the other. Gateway's discount rate is 10.9%. The company plans to continue with one of the two models for the foreseeable future. Based on the costs of each shown here, which should it choose? (Note: dollar amounts are in thousands.) Based on the costs of each model, which should it choose? (Select the best choice below.) OA. Gateway Tours should choose Short and Sweet because the NPV of its costs is smaller. OB. Gateway Tours should choose Old Reliable because it lasts longer. C. Gateway Tours should choose Short and Sweet because the equivalent annual annuity of its costs is smaller. OD. Gateway Tours should choose Old Reliable because the equivalent annual annuity of its costs is smaller. Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Model Year 0 Year 1 Year 2 Year 3 Old Reliable - $201 - $3.9 - $3.9 -$3.9 Year 4 - $3.9 Year 5 - $3.9 Year 6 $3.9 Year 7 - $3.9 Short and Sweet -$100 -$2.2 - $2.2 -$2.2 $2.2 Print Done ×

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter15: Decision Analysis

Section: Chapter Questions

Problem 5P: Hudson Corporation is considering three options for managing its data warehouse: continuing with its...

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Gateway Tours is choosing between two bus models. One is more expensive to purchase and maintain but lasts much longer than the other. Gateway's discount rate is 11.1%. The company plans to continue with one of the two models for the foreseeable future. Based on the costs of each shown here:, which should it choose? (Note: dollar amounts are in thousands.) Based on the costs of each model, which should it choose? (Select the best choice below.) A. Gateway Tours should choose Short and Sweet because the NPV of its costs is smaller. B. Gateway Tours should choose Old Reliable because it lasts longer. O C. Gateway Tours should choose Short and Sweet because the equivalent annual annuity of its costs is smaller. D. Gateway Tours should choose Old Reliable because the equivalent annual annuity of its costs is smaller. Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Model Year 0 Year 1 Year 2 Year 3 Year 4 - $202 - $3.8 -$3.8 - $3.8 - $3.8 Old…
Gateway Tours is choosing between two bus models, one of which lasts longer than the other. Gateway’s discount rate is 8%. It plans to continue with one of the two models for the foreseeable future. Based on the costs of each shown below, which should it choose? For each of the two bus models, give the relevant cost that you would use for comparison purposes. [Note: to make it easier for you to solve this problem, I have already calculated the EAA for one of the buses, as you can see. You do not need to recalculate that one.] Model Year 0 Year 1 Year 2 Year 3 Year 4 Old Reliable 0 -15 -15 -15 -15 Short and Sweet -12 -12 -6 The relevant cost for Old Reliable is: A. -15.00 B. -49.68 C. -14.99 D. -15.01 E. -12.44 F. -15.10 G. -12.42 The relevant cost for Short and Sweet is: A. -15.70 B. -28.26 C. -15.87 D. -9.12 E. -15.84 F. -8.53 G.…
the foreseeable future. Based on the costs of each shown here: 囲, which should it choose? (Note: dollar amounts are in thousands.)
Gateway Tours is choosing between two bus models. One is more expensive to purchase and maintain, but lasts much longer than the other. Gateway's discount rate is 9%. It plans to continue with one of the two models for the foreseeable future. Based on the equivalent annual costs of each, shown below, which should it choose? [Note: I have tried to make it easier for you to solve this problem. You do not need to do extra, unnecessary calculations merely to show me your work.] Model Year 0 Year 1 Year 2 Year 3 -$23 -$21 Year 4 Year 5 Year 6 Old R S &S $0 -$23 -$21 -$23 -$21 -$23 -$21 -$23 -$23 $0 Which bus should Gateway Tours choose? Give me the name of the bus that should be chosen, and the final numbers that justify your answer. Do not explain any concepts - I'm looking for an answer along the lines of "Choose because $ is better than $ [I'm sorry if the columns don't line up perfectly. Old R. is a 6 year project, and S&S is a 4 year project.] B I X, Insert Formula
Gateway Tours is choosing between two bus models. One is more expensive to purchase and maintain but lasts much longer than the other. Gateway's discount rate is 10.8%. The company plans to continue with one of the two models for the foreseeable future. Based on the costs of each shown below, which should it choose? (Note: dollar amounts are in thousands.) Model Year 0 Year 1 Year 5 - $4.2 Year 2 Year 3 - $4.2 - $2.1 Year 4 Year 6 Year 7 - $200 - $101 - $4.2 - $2.1 - $4.2 - $2.1 Old Reliable - $4.2 -$2.1 - $4.2 - $4.2 Short and Sweet Based on the costs of each model, which should it choose? (Select the best choice below.) O A. Gateway Tours should choose Short and Sweet because the equivalent annual annuity of its costs is smaller. O B. Gateway Tours should choose Old Reliable because the equivalent annual annuity of its costs is smaller. OC. Gateway Tours should choose Old Reliable because it lasts longer. O D. Gateway Tours should choose Short and Sweet because the NPV of its costs…
Gateway Tours is choosing between two bus models. One is more expensive to purchase and maintain but lasts much longer than the other. Its discount rate is 11.0%. The company plans to continue with one of the two models for the foreseeable future. Based on the costs of each shown below, which should it choose? (Note: dollar amounts are in thousands.) Model Old Reliable Short and Sweet Year 0 -$200 -$100 Year 1 -$4.0 -$2.0 Year 2 -$4.0 -$2.0 Year 3 -$4.0 -$2.0 Year 4 -$4.0 -$2.0 Based on the costs of each model, which should it choose? (Select the best choice below) OA. Gateway Tours should choose Short and Sweet because the NPV of its costs is smaller. OB. Gateway Tours should choose Short and Sweet because the equivalent annual annuity of its costs is smaller. OC. Gateway Tours should choose Old Reliable because the equivalent annual annuity of its costs is smaller. D. Gateway Tours should choose Old Reliable because it lasts longer. Year 5 -$4.0 Year 6 -$4.0 Year 7 -$4.0
Gateway Tours is choosing between two bus models. One is more expensive to purchase and maintain but lasts much longer than the other. Its discount rate is 10.8%. The company plans to continue with one of the two models for the foreseeable future. Based on the costs of each shown below, which should it choose? (Note: dollar amounts are in thousands.) Model Old Reliable Short and Sweet Year 0 - $199 - $98 Year 1 - $3.9 -$2.1 Year 2 - $3.9 -$2.1 Year 3 -$3.9 -$2.1 Year 4 -$3.9 -$2.1 Year 5 -$3.9 Year 6 - $3.9 Year 7 - $3.9 Based on the costs of each model, which should it choose? (Select the best choice below.) OA. Gateway Tours should choose Short and Sweet because the NPV of its costs is smaller. B. Gateway Tours should choose Old Reliable because it lasts longer. OC. Gateway Tours should choose Short and Sweet because the equivalent annual annuity of its costs is smaller. OD. Gateway Tours should choose Old Reliable because the equivalent annual annuity of its costs is smaller.
None
A company is trying to decide whether to buy a new delivery truck to replace their old one. The old truck originally cost $32,000. The new truck will cost $45,000. If they buy the new truck, they will sell the old truck to a used truck dealer for $4,000. Based on the information given, what is the immediate total incremental cost or benefit of buying the new truck? (Indicate a net benefit as a positive number and a net cost as a negative number.)
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Calculate the number of package tours that must be sold to break even.The general manager at Lifetime Escapes proposes to increase the price of the package tour to $8,200 to decrease the breakeven point in units. Using information in the original problem, calculate the new breakeven point in units. What factors should the general manager consider before deciding to increase the price of the package tour?
Saran Company has contacted Truckel with an offer to sell it 5,000 of the wickets for $18 each. If Truckel makes the wickets, variable costs are $16 per unit. Fixed costs are $8 per unit; however, $5 per unit is unavoidable. Should Truckel make or buy the wickets? a. Buy; savings = $15,000 b. Buy; savings = $5,000 c. Make; savings = $10,000 d. Make; savings = $5,000