Suppose You Have Purchased a Non-Refundable Plane Ticket And, at the Last

question 114

Multiple Choice

Suppose you have purchased a non-refundable plane ticket and, at the last moment, you 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:

Successive Years

Consecutive years following one after the other without interruption.

Compound-Interest GIC

A Compound-Interest Guaranteed Investment Certificate (GIC) is a financial product that pays interest on your initial investment, with the interest being compounded at specified intervals, leading to increased returns over time.

Compounded Semiannually

The calculation of interest where it is added to the principal twice a year, resulting in the interest earning interest semiannually.

Maturity Value

The total amount payable to an investor at the end of a fixed term investment, including principal and interest.