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Managerial Economics and Data Services at Armistead

Essay by   •  March 17, 2019  •  Course Note  •  793 Words (4 Pages)  •  46 Views

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1.Discuss various strategies which Data Services could adopt to make it profitable; based on the exhibits in the case.

2.Identify the opportunity costs and sunk costs in the case and give reasoning for the same.

3.Calculate the break even number of shifts for Data Services on a monthly basis. Ignore the acquisition costs. (Hint: You may want to consider costs that are invariant with respect to # of shifts as fixed costs and also determine the contribution margin per shift.)

4.Assume that Data Services will keep a customer for 5 years. Calculate the break-even number of shifts including customer acquisition costs (amortize the customer acquisition costs over 5 years). (Hint: Again, you may want to consider costs that are invariant with respect to # of shifts – including customer acquisition costs -- as fixed costs and also determine the contribution margin per shift.)

5.Taking acquisition costs into account, calculate the payback period for each customer for Data Services. Ignore time value of money for this purpose.

6.Assume that Data Services will keep a customer for 5 years. Calculate the internal rate of return (IRR) for Data Services over 5 years

(amortize acquisition costs over the 5 year period)

1.Discuss various strategies which Data Services could adopt to make it profitable; based on the exhibits in the case.

2.Identify the opportunity costs and sunk costs in the case and give reasoning for the same.

3.Calculate the break even number of shifts for Data Services on a monthly basis. Ignore the acquisition costs. (Hint: You may want to consider costs that are invariant with respect to # of shifts as fixed costs and also determine the contribution margin per shift.)

4.Assume that Data Services will keep a customer for 5 years. Calculate the break-even number of shifts including customer acquisition costs (amortize the customer acquisition costs over 5 years). (Hint: Again, you may want to consider costs that are invariant with respect to # of shifts – including customer acquisition costs -- as fixed costs and also determine the contribution margin per shift.)

5.Taking acquisition costs into account, calculate the payback period for each customer for Data Services. Ignore time value of money for this purpose.

6.Assume that Data Services will keep a customer for 5 years. Calculate the internal rate of return (IRR) for Data Services over 5 years (amortize acquisition costs over the 5 year period)

1.Discuss various strategies which Data Services could adopt to make it profitable; based on the exhibits in the case.

2.Identify the opportunity costs and sunk costs in the case and give reasoning for the same.

3.Calculate the break even number of shifts for Data Services on a monthly basis. Ignore the acquisition costs. (Hint: You may want to consider costs that are invariant with respect to # of shifts as fixed costs and also determine the contribution margin per

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