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The director of a nonprofit foundation that sponsors 8-week summer institutes for graduate students analyzed the costs and expected revenues for the next summer institute and recommended that the session be canceled. In her analysis she included a share of the foundation's overhead-the salaries of the director and staff and costs of maintaining the office-to the program. She estimated costs and revenues as follows:

Projected revenues (from tuition and fees) $300,000

Projected costs

Overhead $ 50,000

Room and board for students $100,000

Costs for faculty and miscellaneous $175,000

Total costs $325,000

What was the error in the director's recommendation?

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9481650

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