Solve the Problem by Writing a Variation Model

question 240

Multiple Choice

Solve the problem by writing a variation model. The costs of a trucking company vary jointly with the number of trucks in service and the number of hours they are used. When 3 trucks are used for 7 hours each, the costs are $1,533. Find the costs of using 9 trucks, each for 13 hours.

• A) $9,141
• B) $9,441
• C) $8,841
• D) $9,741
• E) $8,541

---

Definitions:

Fixed Cash Receipts

Fixed Cash Receipts refer to the regular, unchanging amount of cash received by a business or individual, typically structured within certain financial arrangements or revenue models.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Lag Strategy

A deliberate decision to not be a first mover in an industry or market, observing and reacting to competitors' actions.

Straddle Strategy

A trading strategy that involves purchasing both a call option and a put option for the same underlying asset, with the same strike price and expiration date, allowing investors to benefit from significant price movements in either direction.