An on-demand taxi service guarantees that it can provide a taxi in five minutes or less. If the service has a fixed number of taxis, how can it most cheaply guarantee "five minutes or less" during busy periods?

• A.It maintains a fleet of taxis large enough to meet demand in busy periods.
• B.It is impossible to keep the guarantee during busy periods.
• C.It raises prices during the busy periods.
• D.It keeps demand low by encouraging drivers to be less polite during busy periods.

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A tech company has just completed market research on a potential new project that would last three years. The research cost $150,000 and determined that the project is expected to bring in $200,000 of revenue annually. The company will have to lease a plant for a total three-year cost of $100,000 and calculates that materials and labor will cost 60 percent of revenue. Given this information, what will economic profits be for the three years, and should the project be adopted?

• A.$240,000. Yes, the project should be adopted.
• B.-$10,000. No, the project should not be adopted.
• C.$140,000. Yes, the project should be adopted.
• D.$140,000. No, the project should not be adopted.

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Which of the following formulas is used to calculate operating income on the income statement of a manufacturing company?

• A.Revenue- operating expense - interest expense
• B.Gross profit - operating expenses
• C.Sales or revenue - operating expenses
• D.Net income + ending balance of cash

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The management of a company is evaluating a potential capital expenditure. They are
using a discount rate of eight percent. They decide to see what the impact would be of changing the discount rate to 10 percent. Which of the following measurements would change?

• A.Net present value
• B.Return on Investment (ROI)
• C.Pay back period
• D.Internal rate of return

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A group of season ticket holders wants to forecast attendance at National Football League (NFL) games for the upcoming season. One ticket holder argues that using the population of the United States as the only independent variable would explain as much as using both the United States population and the percent change in disposable income (per capita) as independent variables. Another ticket holder argues that using the percent change in disposable income (per capita) asthe only independent variable would provide the most accurate forecast. Listed below are the Adjusted R2 values for three regression models. Based on these values, and keeping in mind that the ticket holders are only concerned about forecasting, what is the correct conclusion?
- NFL Attendance vs. US Population and Percent Change in Disposable Income.
Adjusted R2= 0.8964 - NFL Attendance vs. US Population: Adjusted R2= 0.8609 - NFL Attendance vs. Percent Change in Disposable Income. Adjusted R2= -0.0244

• A.The Adjusted R2 of NFL Attendance vs. Percent Change in Disposable Income is negative, so Percent Change in Disposable Income should be excluded from any regression model.
• B.The Adjusted R2 of NFL Attendance vs. US Population is higher than that of NFL Attendance vs. Percent Change in Disposable Income, so US Population should be the only independent variable in the regression model.
• C.The Adjusted R2 of NFL Attendance vs. US Population and Percent Change in Disposable Income is higher than that of either single variable regression model, so both US Population and Percent Change in Disposable Income should be included in the regression model.
• D.There is not any information regarding the p-values of the independent variables, so it is impossible to determine the explanatory power of the regression models.

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