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You want to sign up for satellite TV service beginning August 1 s t and are considering two providers, Undeviating TV and Saucer Network. Both

You want to sign up for satellite TV service beginning August 1st and are considering two providers, Undeviating TV and
Saucer Network. Both providers offer 12-month contracts with comparable packages in terms of the channels included in the
contract. Half of the year (August through February), you are glued to your television to watch as many football games as
possible while the rest of the year you watch no TV. Thus, you intend to cancel or suspend your service on February 28th and
your primary objective is to find the lowest cost plan. The terms for each provider are listed below.
Underiating TV: Monthly cost of service is $54 for the first 6 months but increases by $43 after that. If you choose to use the
autopay feature where Undeviating TV bills your bank account directly, you save $10 month. If you choose to cancel your
one-year contract you must pay $20 month for the remaining months in your contract, i.e.- if you cancel with one month to
go it will cost you $20. Instead of canceling the contract, you may suspend your service for 6 months at no cost and pick the
service back up at the end of the 6 months.
Saucer Network: Monthly cost of service is $75 for the entirety of your contract. If you choose to use the autopay feature
where Saucer Network bills your bank account directly, you save $5 month. If you choose to cancel your one-year contract
you must pay $20/month for the remaining months in your contract, i.e.- if you cancel with three months to go it will cost
you $60. Instead of canceling the contract, you may suspend your service for 6 months at a time for a one-time fee of $5.
Use the provided Excel workbook to develop a spreadsheet that compares your cost for each service using the three-column
format (Scenario-TV1-TV2). Assume you will be utilizing autopay. All calculations should be tracked on your spreadsheet
(i.e.- if utilizing autopay reduces your monthly bill by $10, make this a calculation in your spreadsheet, do not subtract the
$10 in your head). Complete the necessary calculations in the spreadsheet to answer the following questions.
Scenario #1: Continuous service for two years (no suspension or cancellation of service): Remember, for Undeviating TV,
after your first 6 months of service you will be required to pay the higher monthly cost of service.
Scenario #2 : Cancel service after 6 months and sign a new contract 6 months later which you will then cancel again after 6
months: Assume the terms of service will be the same when you sign your new contract beginning the second year. Thus, for
Undeviating TV, you will now be required to pay the lower monthly cost of service for your first 6 months.
Scenario #3: Suspend service after 6 months and pick it up again 6 months later: Suspending your service causes you to lose
the cost savings of autopay after 6 months under both providers if you do this; there may also be a fee for suspending service.
A. For each scenario, calculate: (1) total costs during Year 1 and Year 2; (2) total cost over the entire two-year
period; and (3) average monthly costs (24 months).
B. Assuming you want the lowest cost option, which scenario should you choose?
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