Sig Hansen Runs a Ski Resort in British Columbia

question 157

Multiple Choice

Sig Hansen runs a ski resort in British Columbia. He is considering replacing the ski lifts at the resort. His calculations suggest that if he does, the economic benefits from the upgraded ski-lift operations will total $959,000 over the next six years. The ski lifts he already has are projected to generate $444,000 in economic benefits over the next six years. The new ski lifts would require an initial cash investment of $385,000 and Sig estimates he can sell his existing ski lift equipment for$170,000. Based on these estimates, what is Sig's marginal cost from replacing the ski lifts?

• A) $385,000
• B) $515,000
• C) $574,000
• D) $215,000

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