A Car Wash Services 200 Customers in an Hour on a Lovely

question 9

Multiple Choice

A car wash services 200 customers in an hour on a lovely Saturday afternoon. The car wash employs 5 washers at $6 per hour and uses $50 of water and $5 of electricity per hour. They charge $10 per car for their standard wash job. Which of these changes would have the greatest positive impact on their productivity?

• A)increasing their service rate so they can process 210 cars per hour
• B)cutting their employee pay by $1 per hour
• C)charging $11 per standard wash job
• D)introducing a new waterless system

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Definitions:

Tax Bracket

A range of incomes taxed at a specific rate under a progressive tax system, where different portions of income are taxed at increasing rates.

PV Of CCA Tax Shield

The present value of the reduction in taxes payable by a firm due to the depreciation expenses claimed on its capital assets.

PV Of After-Tax Lease Payments

The present value of lease payments after accounting for taxes, used to evaluate the financial cost or benefit of leasing.

Original Investment

The initial amount of money put into a project, asset, or venture.