Determine the opportunity cost of owning and operating the independent business. Based solely on financial considerations, should Mr. John sell the taxi and accept the position as dispatcher?
Determine the opportunity cost of owning and operating the independent business. Based solely on financial considerations, should Mr. John sell the taxi and accept the position as dispatcher?
Chapter11: Investor Losses
Section: Chapter Questions
Problem 54P
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Question
Steve John owns his own taxi, for which he bought a Rs. 18,000 permit to operate two years ago. Mr. John earns Rs. 36,000 a year operating as an independent but has the opportunity to sell the taxi and permit for Rs. 73,000 and take a position as dispatcher for Santino Taxi Co. The dispatcher position pays Rs. 31,000 a year for a 40-hour week. Driving his own taxi, Mr. John works approximately 55 hours per week. If he sells his business, he will invest Rs. 73,000 and can earn a 10 percent return.
Required
- Determine the opportunity cost of owning and operating the independent business.
- Based solely on financial considerations, should Mr. John sell the taxi and accept the position as dispatcher?
iii. Discuss the qualitative as well as quantitative factors that Mr. John should consider.
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT