What is the annual cost of purchasing tires (D times price) in the mountain bikes scenario?

Prepare for the PHFO Quantitative Analysis For Business Exam. Study with flashcards, multiple choice questions, hints, and explanations to ensure confidence and success in your exam!

Multiple Choice

What is the annual cost of purchasing tires (D times price) in the mountain bikes scenario?

Explanation:
The key idea is straightforward: total annual cost is the quantity bought in a year times the cost of one tire. In this setup, you multiply D (the yearly tire demand) by price (the cost per tire) to get the annual outlay. If you plug in the problem’s numbers and they yield 1,200 tires at $90 each, the calculation is 1,200 × 90 = 108,000. That gives the stated annual cost, so the result aligns with the given information. Any other total would come from different values for D or price, but with the provided data the product is 108,000.

The key idea is straightforward: total annual cost is the quantity bought in a year times the cost of one tire. In this setup, you multiply D (the yearly tire demand) by price (the cost per tire) to get the annual outlay. If you plug in the problem’s numbers and they yield 1,200 tires at $90 each, the calculation is 1,200 × 90 = 108,000. That gives the stated annual cost, so the result aligns with the given information. Any other total would come from different values for D or price, but with the provided data the product is 108,000.

More Multiple Choice Questions
Subscribe

Get the latest from Passetra

You can unsubscribe at any time. Read our privacy policy