The Operations Manager for a Local Bus Company Wants to Decide

question 28

Multiple Choice

The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, medium, or high, as follows: $$\begin{array} { | l | c | c | c | } \hline \text { Bus } &&{ \text { DEMAND } } \\\hline & \text { LOW } & \text { MEDIUM } & \text { HIGH } \\\hline \text { Small } & 50 & 60 & 70 \\\hline \text { Medium } & 40 & 80 & 90 \\\hline \text { Large } & 20 & 50 & 120 \\\hline\end{array}$$
If he uses the maximin criterion, which size bus will he decide to purchase?

• A) small
• B) medium
• C) large
• D) either small or medium
• E) either medium or large

Evaluate the effects of intra-group transactions on NCI and consolidation adjustments.

Interpret the impact of dividends paid by subsidiaries on NCI and parent equity.

Demonstrate understanding of the calculation and adjustment of NCI share at the acquisition date.

Explore reasons and implications of holding less than 100% ownership in a subsidiary.

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Definitions:

Consumption When Old

Consumption when old refers to the spending habits of individuals during retirement or later stages of life, often planned through savings and pension.

Retirement

The phase of life where an individual stops full-time work, often accompanied by receiving a pension or retirement benefits.

Optimal Purchasing

The process of buying goods or services in the quantity and timing that minimizes costs and maximizes value to the purchaser.

Indifference Curves

Graphical representations used in economics to show different combinations of two goods that give an individual equal satisfaction and utility.