Table 1-3 Santiago Runs a Comic Book Store in the in the Town

question 35

Multiple Choice

Table 1-3
Santiago runs a comic book store in the town of East Arbor. He is debating whether he should extend his hours of operation. Santiago figures that his sales revenue will depend on the number of hours the store is open as shown in the table above. He would have to hire a worker for those hours at a wage rate of $18 per hour.
-Refer to Table 1-3. What is Santiago's marginal benefit if he decides to stay open for two hours instead of one hour?

• A) $40
• B) $50
• C) $120
• D) $190

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Definitions:

Present Value

The current value of a future sum of money or stream of cash flows, given a specified rate of return.

Compound Interest

Interest that's computed on the initial principal sum including the total of all previously earned or accrued interest on a deposit or loan.

Earnings Rate

The rate at which an investment or savings account is expected to grow over a specified period, often expressed as a percentage.

Internal Rate of Return

A metric used in financial analysis to estimate the profitability of potential investments, calculating the interest rate at which the net present value of all cash flows is zero.