The As-You-Like-It Hamburger Shop Is Considering Adding a New Location

question 54

Essay

The As-You-Like-It Hamburger Shop is considering adding a new location. The investment at each of the four potential sites is the same. The price they can charge for hamburgers is set by the competition in the area.
Given the information below, which site is expected to be the most profitable?
$\begin{array}{lccc}\underline{\text {Factor}}& \underline{\text { Site A } }& \underline{ \text { Site B }}& \underline{ \text { Site C }}&\underline{ \text { Site D}}\\\text {Fixed Cost}& \$ 10,000 & \$ 8,000 & \$ 6,000 & \$ 11,000 \\\text {Variable Cost per Unit}&\$ 0.70 & \$ 0.70 & \$ 0.85 &\$ 0 .65 \\\text {Price per Unit}&\$ 1.30 & \$ 1.20 & \$ 1.25 & \$1.10 \\\text {Forecast Volume Units)}& 20,000 & 22,000 & 18,000 & 24,00 \\ \end{array}$

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Definitions:

Projective Tests

Psychological tests used to infer a person’s motives, conflicts, and unconscious dynamics on the basis of the person’s interpretations of ambiguous stimuli.

Objective Tests

Examinations that require the test taker to select or provide a response from a set of predetermined options.

Personality Inventories

Standardized questionnaires used to assess personality traits and characteristics of individuals.

Ambiguous Pictures

Visual stimuli that can be interpreted in more than one way, often used in psychological tests to assess perception and personality.