An Entrepreneur Is Considering How Many Limousines to Purchase When

question 81

Multiple Choice

An entrepreneur is considering how many limousines to purchase when he starts up a limousine service. Below are his estimates of the number of limousine rentals the service will make during a year, depending on the number of limousines available. After paying all non-interest expenses, the owner expects to net $10 per rental. Each limousine costs $50,000. How many limousines should he purchase if the real interest rate is 4.5%?

• A) 1.
• B) 2.
• C) 3.
• D) 4.

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Definitions:

Circadian Rhythm

The internal mechanism controlling the cycle of sleeping and waking, which recurs approximately every 24 hours.

Concentrate

To focus one's attention or mental effort on a specific object, task, or goal, often by eliminating distractions.

Late Afternoon

The part of the day that extends from the mid to late afternoon, often considered to start around 3 pm and last until sunset.

Circadian Arousal

The fluctuation of physiological and behavioral processes, including wakefulness and sleepiness, following a roughly 24-hour cycle, influenced by external light-dark cycles.