Tutors-R-Us Provides Academic Enrichment and Review Activities for High School

question 12

Multiple Choice

Tutors-R-Us provides academic enrichment and review activities for high school students in 4 subject areas: English, mathematics, science, and history. In November 2010, the firm's information system produced the following data: Regardless of subject area, clients pay $50 per hour for tutoring services. Costs associated with the Tutors-R-Us operations for November 2010 included:
Assume Tutors-R-Us allocates facility rent, custodial services, and utilities on the basis of square metres occupied and computer equipment depreciation on the basis of number of students. Advertising is not allocated. If students received 200 hours of mathematics tutoring in November 2010, what will the total profit from mathematics tutoring be for the same period?

• A) $10,000
• B) $8,775
• C) $8,488
• D) $488

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Definitions:

Cash Flows

The net amount of cash being transferred into and out of a business, typically categorized into operating, investing, and financing activities.

Present Value

Present Value refers to the value today of an amount of money that is to be received in the future, adjusted for a certain rate of return.

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

Dollar Amount

The value of something represented in terms of the currency of the United States, expressed as a quantity of dollars.