1. Bays Discount Brokerage is trying to determine the cost of supplying computing resources in order to determine how much to charge for trades. The organizations cost analysis is perplexed because Bays has acquired 80 servers to meet peak capacity needs, which occurs between 9:00 a.m. and 5:00 p.m. local time, but only needs the capacity of 20 servers during the remaining time. The costs associated with each server are $3,696 per month and each server is available for use for 24 hours per day for an average of 22 days per month.

(a) What cost per hour would you advise for peak-hour consumption? Explain why you think this cost rate is appropriate?

(b) What cost per hour would you advise for non-peak-hour capacity consumption? Explain why you think this cost rate is appropriate?