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Steve and Bob are students at Berkeley College. They share an apartment that is owned by Bob. Bob is considering subscribing to an Internet provider
Steve and Bob are students at Berkeley College. They share an apartment that is owned by Bob. Bob is considering subscribing to an Internet provider that has the following packages available: Package Per Month A. Internet access $ 60 B. Phone services 20 C. Internet access phone services 75 Steve spends most of his time on the Internet ("everything can be found online now"). Bob prefers to spend his time talking on the phone rather than using the Internet ("going online is a waste of time"). They agree that the purchase of the $75 total package is a "win-win situation. Requirements Allocate the $75 between Steve and Bob using (a) the stand-alone cost-allocation method, (b) the incremental cost-allocation method, and (c) the Shapley value method. 2. Which method would you recommend they use and why? CE Requirement 1. Allocate the $75 between Steve and Bob using (a) the stand-alone cost-allocation method, (b) the incremental cost-allocation method, and (c) the Shapley value method. (Round your answers to the nearest cent.) Costs allocated to Steve Bob 56.25 18.75 (a) Stand-alone (b) Incremental 60 Steve primary user Bob primary user (c) Shapley 20 575 15 55 17.5
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