Question

1-23 You must fly to another city for a Friday meet- ing. If you stay until Sunday morning your ticket will be S250, rather than $800. Hotel costs are S200 per night. Compare the economics with reason- able assumptions for meal expenses. What intangible consequences may dominate the decision?

Answer 1

Assuming if we opt for a round trip on the same day the cost to be incurred would be $800 on the other hand by staying untill sunday morning the ticket price would be $250. I'm assuming price of $250 for each trip making the to and fro costing $500 for travelling.By opting to stay until Sunday morning we have to stay for two nights in a hotel on friday and saturday costing $400($200*2) in total. Assuming the meal costs to be $40 per meal (as per american national average) costing in total $200($40*5). The total cost to be incurred by opting to stay until sunday morning would be $1100 which is not a good thing when compared to the former option of incurring $800.