Exhibit 12.4. The Following Questions Use the Information Below

Multiple Choice

Exhibit 12.4.
The following questions use the information below.
The manager of a Washington, DC sightseeing tour company is concerned about overbooking for one of his bus tours. The bus has 15 seats but sometimes there are empty seats. His records show that about 20% of ticket holders do not show up for their tour. Tickets cost $10 and are non-refundable. If the manager overbooks the tour and more than 15 passengers show up, some of them will be bumped to a later tour. This bumping costs the company $25 in various expenses to keep the customer happy until the next tour. The manager wants to see what happens to profits if 18 reservations are accepted.
-Using the information in Exhibit 12.4, what formula should go in cell C13 of the worksheet to determine the Opportunity Cost of Empty Seats?

A) =C5*MAX(C4,C10)
B) =C5*MAX(C4,0)
C) =MAX(C4-C10,0)
D) =C5*MAX(C4-C10,0)