Suppose you work for a small city that possesses a large fairgrounds.There is a weekend several months from now with no planned activity at the fairgrounds.You have asset budget of $5 million and you must choose from among the following events which could be hosted there.Assume for the sake of simplicity that more than one event can take place that weekend so long as you remain within your budget constraint.However, the same event cannot take place twice.
County Fair : Total Costs $5 million - Total Benefits$8 million
Adult Obstacle Course: Total Costs - Total Benefits $1 million $2.5 million
Car Show : Total Costs$2.5 million - Total Benefits $5 million
Dirt Bike Race: Total Costs $4 million - Total Benefits $6.5 million
Music Festival : Total Costs $2 million - Total Benefits $3 million
-Using net benefits formula, which of the events above should be chosen?
A)County Fair
B)Dirt Bike Race & Adult Obstacle Course
C)Car Show & Adult Obstacle Course
D)Music Festival & Car Show

Question

Quizplus · Accepted Answer

The net benefits for each event are calculated as follows: County Fair ($3 million), Adult Obstacle Course ($1.5 million), Car Show ($2.5 million), Dirt Bike Race ($2.5 million), and Music Festival ($1 million). By choosing the Car Show and Adult Obstacle Course, the total cost is $3.5 million, which is within the budget, and the combined net benefit is $4 million, maximizing the use of the budget while achieving high net benefits.

Suppose You Work for a Small City That Possesses a Large