XLB Sports Has 30 Franchises (Teams)

question 48

Multiple Choice

XLB Sports has 30 franchises (teams) .Although most of the teams make an annual profit, some teams report losses.An owner of a team that loses money can still make a profit when he sells the franchise since equity increases have been greater than reported losses.XLB has requested a model to determine which, if any, franchises should be eliminated.The costs associated with team elimination include the buyout of the owner, paying off existing contracts such as ballpark leases, and anticipated legal costs.The objective function is the overall profit of XLB.Because all teams must play on the same day, the number of teams must be an even number.Some teams may lose money at home but help other teams by drawing well in road games. Which of the following is true?

• A)Teams reporting a loss should be eliminated.
• B)You should use binary variables in a mixed integer model.
• C)The problem can be solved by solving 30 team integer linear programming models.
• D)The problem cannot be modeled.

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Definitions:

Accounting Cycle

A series of steps taken in order to prepare financial statements, starting from transactions and ending with closing the books.

Post-closing Trial Balance

A financial statement that lists all accounts and their balances after closing entries have been made, usually the final step in the accounting cycle.

Reversing Entries

Journal entries made at the beginning of an accounting period to reverse or cancel out adjusting entries from the end of the previous period.

Adjusting Entries

These are journal entries made in an accounting period to allocate income and expenditures to the period in which they actually occurred.