Answer the Following Questions Using the Information Below

question 136

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 is the estimated life-cycle operating income for the first year?

• A) $206,250
• B) $162,500
• C) $(43,750)
• D) $43,750

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Definitions:

Stability And Change

The concept in psychology and other fields that examines the dynamic balance between maintaining consistency and undergoing transformation.

Terminal Illness

A disease or condition that is expected to lead to death because it is incurable.

Social Attitudes

The prevailing or common feelings, beliefs, and behavioral tendencies directed towards socially significant objects, groups, or symbols.

Temperament

An individual's innate disposition or behavioral style and characteristic emotional responses.