John Is Trying to Decide How to Divide His Time

question 79

Multiple Choice

John is trying to decide how to divide his time between his job as a stocker in the local grocery store, which pays $7 per hour for as many hours as he chooses to work, and cleaning windows for the businesses downtown. He makes $2 for every window he cleans. John is indifferent between the two tasks, and the number of windows he can clean depends on how many hours he spends cleaning in a day, as shown in the accompanying table.  
What is the lowest price per window that John would be willing to accept to spend 4 hours per day cleaning windows?

• A)$7
• B)$2
• C)$3.50
• D)$11

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Definitions:

Times Interest Earned Ratio

A financial ratio that measures a company's ability to meet its debt obligations by comparing its income before interest and taxes to its interest expenses.

Inventory Turnover

A measure of how quickly a company sells its inventory within a given period, indicating the efficiency in managing and selling products.

Carrying Amount

The book value of an asset or liability; for assets, it's typically the original cost less any depreciation.

Face Value

The nominal value stated on a financial instrument, such as a bond or stock certificate, representing its legal value.