If it is estimated that thirty persons will be living in this new chapter house, what would be the Skull's annual cost savings by selecting the less costly location, rather than the more costly?
A)$0
B)$1,500
C)$200
D)$150
E)$350

Question

Quizplus · Accepted Answer

Since the difference in rent is $5000, and the cheaper location saves $50 per person per month, the Skull will save $50*30*12 = $18,000 per year. The cost savings per person per year will be $600. Therefore, Skull's annual cost savings by selecting the less costly location will be $600*30 = $18,000. So, option B is the correct answer as it states the annual cost savings to be $1,500.

If It Is Estimated That Thirty Persons Will Be Living