Frank is considering transportation modes to a client's office. He can drive his own car, at an incremental cost of $0.55 per km, or take a company car. If he takes his own car, he can be reimbursed $0.45 per km. If Frank makes his decision strictly from his personal economic point of view, what is the relevant net cost associated with driving his own car?
A)$0.10
B)$0.45
C)$0.55
D)Some other amount

Question

Quizplus · Accepted Answer

The relevant net cost for Frank is the difference between the incremental cost of driving his own car ($0.55 per km) and the reimbursement he receives ($0.45 per km), which is $0.10 per km.

Frank Is Considering Transportation Modes to a Client's Office