Answer the Following Questions Using the Information Below

question 125

Multiple Choice

Answer the following questions using the information below:
Knowledge Transfer Associates is in the process of evaluating its new client services for the business systems consulting division.
• Server Planning, a new service, incurred $250,000 in development costs.
• The direct costs of providing the service, which is all labor, averages $50 per hour.
• Other costs for this service are estimated at $300,000 per year.
• The current program for server planning is expected to last for two years. At that time, expected new operating systems are likely to make the service non viable.
• Customer service expenses average $250 per client, with each job lasting an average of 40 hours. The current staff expects to bill 15,000 hours for each of the two years the program is in effect. Billing averages $90 per hour.
-What are the estimated life-cycle revenues?

• A) $2,700,000
• B) $3,000,000
• C) $3,400,000
• D) $1,350,000

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Definitions:

Proposal Specifics

Refers to the detailed information or conditions outlined in a proposal that addresses the specifics of a project, service, or agreement.

Imagery

The use of vivid or figurative language to represent objects, actions, or ideas.

Grandmother

A Grandmother is a woman who is the mother of one's parent, often playing a significant role in family structure and traditions.

Parable

A brief story used to illustrate a point.