Use This Information and Output to Answer the Following Questions

question 25

Multiple Choice

Use this information and output to answer the following questions.
Rentals-R-Us specializes in 4WD car rentals.The number of rentals per month typically ranges between 10 and 50.You may assume equal probability for the number of rentals to assume any value in that range.The monthly operating costs for Rentals-R-Us can range anywhere from $2,000 to $4,000,with $3,000 being the most probable cost.Each rented vehicle generates $55 in revenues.You decide to build a simulation model in Crystal Ball to simulate monthly profits.
$$\begin{array} { | l | l | c | } \hline & { \text { A } } & \text { B } \\\hline 1 & \text { Rentals-R-Us } & \\\hline 2 & \text { Number of car rentals } & 50 \\\hline 3 & \text { Rental per car } & \$ 55 \\\hline 4 & \text { Monthly operating costs } & \$ 2,000 \\\hline 5 & \text { Profit or loss } & \$ 750 \\\hline\end{array}$$
-Refer to the table.Which cell(s) would be designated as the "Forecast cell"?

• A)A5
• B)B2
• C)B3
• D)B4
• E)B5

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Definitions:

Financial Risk

The possibility of losing money on an investment or business venture.

Economic Exposure

The risk that a company's cash flow, foreign investments, or earnings may change due to exchange rate fluctuations.

Manufacturing Costs

The total expenses directly involved in producing goods, including raw material, labor, and overhead costs, crucial for determining the final price of products.

Forward Contract

A non-standardized agreement between two parties to buy or sell an asset at a specified future date for a price that is agreed upon today.