Cost of Owning and Operating the Independent Business Assignment
Norman Dowd owns his own taxi, for which he bought an $11,800 permit to operate two years ago. Mr. Dowd earns $35,400 a year operating as an independent but has the opportunity to sell the taxi and permit for $45,500 and take a position as a dispatcher for Carter Taxi Co. The dispatcher position pays $36,500 a year for a 40-hour week. Driving his own taxi, Mr. Dowd works approximately 55 hours per week. If he sells his business, he will invest the $45,500 and can earn a 10 percent return. 4 nts
Required a. Determine the opportunity cost of owning and operating the independent business.
b. Calculate the earnings of Norman Dowd operating as an independent and the earnings of Norman Dowd working as a dispatcher. Based solely on financial considerations, should Mr. Dowd sell the taxi and accept the position as a dispatcher? eBook Hint Ask Print a. Opportunity cost b. Operating as an independent Working as a dispatcher 59,000 references 59,000 Should Mr. Dowd sell the taxi and accept the position as a dispatcher? Yes.