Simon Estimates That the Fixed Costs Associated with Opening a New

question 5

Multiple Choice

Simon estimates that the fixed costs associated with opening a new bank branch are $500,000. He expects the branch to attract 1,000 new customer accounts in the first year, each of which will cost $50 per year to service. He also expects to generate $100,000 per year in revenue. For Simon, the total cost of opening the new branch and remaining open for one year will be

• A)$500,000.
• B)$550,000.
• C)$650,000.
• D)$450,000.
• E)$605,000.

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Definitions:

Multidisciplinary Program

A program that involves experts from multiple fields of study working together towards a common goal.

Discipline

A branch of knowledge, typically one studied in higher education or a field of study.

Study

The act of applying one's mind to learning or understanding a subject, through reading, observation, or research.

Superinfection

An infection following a previous infection, especially when caused by microorganisms that are resistant or have become resistant to the antibiotics used earlier.