Suppose You Have Purchased a Nonrefundable Plane Ticket And,at the Last

question 28

Multiple Choice

Suppose you have purchased a nonrefundable plane ticket and,at the last moment,cannot take the trip.You can,however,sell the ticket.If you paid $700 for the ticket,the cost of sending the ticket to someone through overnight mail is $20,and you spend $10 on a courier to get the ticket to the post office for overnight delivery,what is the minimum you should accept for the ticket?

• A)$700 because that is what the ticket cost
• B)$720 because that is the cost of the ticket and of getting it to the buyer
• C)$730 because that is the total cost of the ticket and getting it to the buyer
• D)More than $730,so that you can make a profit
• E)$30 because the $700 is a sunk cost

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Definitions:

Year 2

Generally refers to the second year in a given context, such as the second year of a company's operations or a multi-year study.

Times Interest Earned Ratio

A financial metric used to measure a company's ability to meet its debt obligations, calculated by dividing earnings before interest and taxes (EBIT) by interest expenses.

Return On Total Assets

measures a company's earnings before interest and taxes (EBIT) relative to its total assets, indicating efficiency in using assets to generate profits.

Times Interest Earned Ratio

A financial metric that measures a company's ability to pay its interest expenses on outstanding debt with its earnings before interest and taxes.