Imagine that you have just flown into another city and that you are taking a taxi from the airport to your hotel. As usual, you see a meter prominently displaying the cost of the fare. As the taxi continues toward your destination, the displayed fare ticks upward. On the car window, you notice the following information:
Flag (includes first 1/13th km)……………………S2.70
Per kilometer……………………………………....$1.58
Per hour………………………………………….$28.20
Required:
Applying concepts from accounting theory discuss the rationale for the metered taxi fare system and evaluate its effectiveness.