Raymond Estimates That the Fixed Costs Associated with Opening a New

question 29

Multiple Choice

Raymond estimates that the fixed costs associated with opening a new bank branch are $500 ,000.He expects the branch to attract 1,000 new customer accounts in the first year,each of which will cost $50 per year to service.He also expects to generate $100,000 per year in revenue.For Raymond,the total cost of opening the new branch and remaining open for one year will be

• A) $500
• ,000.
• B) $550
• ,000.
• C) $650
• ,000.
• D) $450
• ,000.
• E) $605
• ,000.

---

Definitions:

Gasoline

A volatile flammable liquid derived from petroleum, used mainly as fuel in internal combustion engines.

Tax Levied

A compulsory financial charge or some other type of levy imposed on a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Tax Incidence Analysis

The study of who bears the burden of taxes, in terms of economic impact and how it affects different market participants.

Tax Payment

The process of making payments to a government authority for income earned, sales completed, or property owned.