Fun Time Inc

question 94

Multiple Choice

Fun Time Inc. uses the same property and equipment to provide skiing services for six months during the winter and mountain roller boarding for six months during the summer. Monthly revenue and cost figures during the summer and winter months for Fun Time are shown below. Fun Time's $1,000 monthly fixed costs will be incurred as long as it remains in business.

Which of the following should Fun Time do if it wants to maximize its annual profit?

• A) operate in both the winter and summer
• B) operate in the summer, but shut down during the winter
• C) operate in the winter, but shut down during the summer
• D) go out of business immediately

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Definitions:

Enforced

The act of compelling compliance or obedience to a law, rule, agreement, or obligation through legal or authoritative means.

Intended Beneficiary

A third party to a contract whom the contracting parties intended to benefit directly from their contact.

Prenuptial Agreement

A contract entered into prior to marriage specifying the distribution of assets in the event of divorce or death.

Ownership Rights

The legal rights to use, control, and dispose of property or assets.