The Following Information Is Given Regarding Driving Lessons Provided by Arrive

question 88

Multiple Choice

The following information is given regarding driving lessons provided by Arrive Alive Company over several spans of time: Select the incorrect statement from the following. $$\begin{array} { | l | r | r | r | } \hline & { \text { Length of Time } } \\\hline & \text { TODAY } & \text { ONE YEAR } & \text { FIVE YEARS } \\\hline \text { Total cost of lessons } & \$ 600 & \$ 110,000 & \$ 508,000 \\\hline \text { Number of lessons } & 50 & 10,000 & 55,000 \\\hline\end{array}$$

• A)The average cost per lesson over the five-year period was $9.24.
• B)Based on the most current information, the cost per lesson was $12.00.
• C)The average cost based on the total five-year period is probably the most appropriate cost for pricing purposes.
• D)The selection of the most appropriate time span for calculating the average cost often requires considerable judgment.

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Definitions:

Regulatory Capture

A situation where regulatory agencies are dominated by the industries they are supposed to regulate, leading to policies that benefit the industry at the expense of the public interest.

Securities And Exchange Commission

A federal agency responsible for regulating the securities industry, enforcing federal securities laws, and protecting investors in the United States.

Socialize Losses

The process where financial losses are distributed broadly across society or a large group, rather than being borne solely by the entity responsible for incurring them.

Imprudent Investment

Financial allocations or commitments made without proper judgment or care, often leading to significant losses or suboptimal financial performance.