Mariana has decided that she would like to build a private electric railway that would directly connect her small town to her favorite casino 75 miles away. she discovers that to build her railway, she will need to purchase an equal amount of land from 5 ranchers: abe, ben, cat, don, and eve. mariana believes that the revenue she would receive from running the railroad would be enough to cover all of her construction costs and leave her $3 million to buy the land. mariana calculates the land she needs to build the railway will cost her $2 million.

Exercise 2-12 cost behavior; high-low method [lo2-3, lo2-4] speedy parcel service operates a fleet of delivery trucks in a large metropolitan area. a careful study by the company’s cost analyst has determined that if a truck is driven 120,000 miles during a year, the average operating cost is 11.6 cents per mile. if a truck is driven only 80,000 miles during a year, the average operating cost increases to 13.6 cents per mile. required: 1.& 2. using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (round the "variable cost per mile" to 3 decimal places.)