Maria Has to Choose Between Driving and Taking a Train

question 67

Multiple Choice

Maria has to choose between driving and taking a train to destination A. Traveling by train will cost her $400 and will take 4 hours. Driving to destination A takes 6 hours, and the required amount of gasoline costs $250. Her opportunity cost of time is $15 per hour.
-Refer to the scenario above.If the opportunity cost of time increases to $80 per hour,which of the following statements is true?

• A) Maria should choose to drive, as it saves her $10.
• B) Maria should choose to drive, as it saves her $150.
• C) Maria should choose to travel by train, as it saves her $10.
• D) Maria should choose to travel by train, as it saves her $150.

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Definitions:

Annual Dividend

The total amount of dividends that a company pays out to its shareholders over a year.

Market Rate

The prevailing interest rate available in the marketplace on investments or loans.

Dividend Growth Rate

The annualized percentage rate of growth of a company's dividend payments, indicating the stability and growth potential of the dividends over time.

Investor's Return

The profit or loss realized by an investor, typically reflected as a percentage of the investment's initial value.