Kyleigh and Katya met during freshman orientation in college. They bonded almost instantly and became very good friends. During their junior year, they found a two-bedroom house for rent in a quiet residential neighborhood near their school.
As the first person in, Kyleigh chose the largest room - this room also happened to have the best view. The two friends then started to figure out how they would handle the various expenses associated with living in a house. They wanted an equitable basis for allocating the rent and utilities (electricity, water, and cable TV; each has her own cell phone). In addition, they wanted to figure out a way to allocate food expenses as they anticipated cooking at home.
Required:
a. Discuss three ways that the friends could allocate the rental cost between themselves. What are the costs and benefits of each method?
b. Would you recommend that the two friends choose different allocations for the different expenses? Why or why not?