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Scenario 13

question 111

Multiple Choice

Scenario 13.1 Use the following to answer the questions.
The YMCA in mid-town Atlanta has recently upgraded its facilities, including building a new Olympic-sized swimming pool and children's playground. All locations of the Atlanta "Y" are open from 6:00 am until 11:00 pm, 360 days a year. The children's playground is accessible for members only and is a fenced and secured area. During the weekdays, children under the age of 12 can engage in supervised activities at the playground, for no extra fee. Additionally, there are swimming classes for children of all ages, which is also covered by the monthly membership fee. The swimming pool has been very popular with the professionals who stop by for a swimming workout before or after work.
Many of the YMCA locations are very busy all day; however, the midtown "Y" is busier during the early morning and early evenings. At a recent meeting, Maya Sinclair, its manager, shared her concerns about getting more people into the "Y" at other times of the day. She asked for ideas from her staff about how to do this. She also said that the city of Atlanta had reduced the "Y"'s funding for the next year by 20%. This would cause a need for the "Y" to either gain additional members or charge more per member for the annual fee.
Refer to Scenario 13.1. One of Maya's staff suggested that they offer senior citizens a free month of membership for every person they recommended to the "Y." This particular form of promotion would be designed to

Definitions:

Retained Earnings

The portion of net income not distributed as dividends to shareholders, but retained by the company for reinvestment.

MACRS 3-Year Class

A category under the Modified Accelerated Cost Recovery System (MACRS) for depreciating certain types of business property over three years.

Amortized

Amortization is the process of spreading out a loan into a series of fixed payments over time, covering both principal and interest.

Residual Value

The estimated value of an asset at the end of its useful life.