Simon Estimates That the Fixed Costs Associated with Opening a New

Simon estimates that the fixed costs associated with opening a new bank branch are $500,000. He expects the branch to attract 1,000 new customer accounts in the first year, each of which will cost $50 per year to service. He also expects to generate $100,000 per year in revenue. For Simon, the total cost of opening the new branch and remaining open for one year will be

A) $500,000.
B) $550,000.
C) $650,000.
D) $450,000.
E) $605,000.

Correct Answer:

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