Your Subscription to Jogger's World Monthly Is About to Run

question 60

Multiple Choice

Your subscription to Jogger's World Monthly is about to run out and you have the choice of renewing it by sending in the $10 a year regular rate or of getting a lifetime subscription to the magazine by paying $100.Your opportunity cost is 7 percent.How many years would you have to live to make the lifetime subscription the better buy? Payments for the regular subscription are made at the beginning of each year.(Round up if necessary to obtain a whole number of years. )

• A) 15 years
• B) 10 years
• C) 18 years
• D) 7 years
• E) 8 years.

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Definitions:

Estimated Costs

Projected expenses or costs that are predicted in advance of actually incurring them, often used for budgeting and planning purposes.

Yield Pricing

A strategy in price management where prices are adjusted based on demand to maximize revenue.

Differential Analysis

A financial technique used to evaluate decisions by examining the costs and benefits of alternative actions and their impacts on company finances.

Bottleneck

A point of congestion in a production system that occurs when workloads arrive too quickly for the production process to handle, thereby limiting throughput.