A delivery company is considering adding another vehicle to its delivery fleet; each vehicle is rented for $350 per day. Assume that the additional vehicle would be capable of delivering 1,750 packages per day and that each package that is delivered brings in 35 cents in revenue. Also assume that adding the delivery vehicle would not affect any other costs. Instructions: Enter your answers rounded to 2 decimal places. a. What is the MRP? What is the MRC? MRP = MRC = $ Should the firm add this delivery vehicle? (Click to select) = b. Now suppose that the cost of renting a vehicle doubles to $700 per day. What are the MRP and MRC? MRP = MRC = $ Should the firm add a delivery vehicle under these circumstances? (Click to select) = c. Next suppose that the cost of renting a vehicle falls back down to $350 per day but, due to extremely congested freeways, an additional vehicle would only be able to deliver 750 packages per day. What are the MRP and MRC in this situation? MRP = $ MRC = $ Would adding a vehicle under these circumstances increase the firm's profits? (Click to select) =
A delivery company is considering adding another vehicle to its delivery fleet; each vehicle is rented for $350 per day. Assume that the additional vehicle would be capable of delivering 1,750 packages per day and that each package that is delivered brings in 35 cents in revenue. Also assume that adding the delivery vehicle would not affect any other costs. Instructions: Enter your answers rounded to 2 decimal places. a. What is the MRP? What is the MRC? MRP = MRC = $ Should the firm add this delivery vehicle? (Click to select) = b. Now suppose that the cost of renting a vehicle doubles to $700 per day. What are the MRP and MRC? MRP = MRC = $ Should the firm add a delivery vehicle under these circumstances? (Click to select) = c. Next suppose that the cost of renting a vehicle falls back down to $350 per day but, due to extremely congested freeways, an additional vehicle would only be able to deliver 750 packages per day. What are the MRP and MRC in this situation? MRP = $ MRC = $ Would adding a vehicle under these circumstances increase the firm's profits? (Click to select) =
Chapter17: Capital And Time
Section: Chapter Questions
Problem 17.6P
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Transcribed Image Text:A delivery company is considering adding another vehicle to its delivery fleet; each vehicle is rented for $350 per day. Assume that
the additional vehicle would be capable of delivering 1,750 packages per day and that each package that is delivered brings in 35
cents in revenue. Also assume that adding the delivery vehicle would not affect any other costs.
Instructions: Enter your answers rounded to 2 decimal places.
a. What is the MRP? What is the MRC?
MRP =
MRC = $
Should the firm add this delivery vehicle? (Click to select) =
b. Now suppose that the cost of renting a vehicle doubles to $700 per day. What are the MRP and MRC?
MRP
=
MRC = $
Should the firm add a delivery vehicle under these circumstances?
(Click to select) =
c. Next suppose that the cost of renting a vehicle falls back down to $350 per day but, due to extremely congested freeways, an
additional vehicle would only be able to deliver 750 packages per day. What are the MRP and MRC in this situation?
MRP = $
MRC = $
Would adding a vehicle under these circumstances increase the firm's profits?
(Click to select) =
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