Requirements

1. Allocate the $90 between Nolan and Evan 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?

Nolan and Evan are students at Berkeley College. They share an apartment that is owned by Evan. Evan is considering subscribing to an Internet provider that has the following packages available: Package Per Month A. Internet access $ 85 B. Phone services 15 C. Internet access + phone services 90 Nolan spends most of his time on the Internet ("everything can be found online now"). Evan 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 $90 total package is a win-win situation Requirements 1. Allocate the $90 between Nolan and Evan 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? Requirement 1. Allocate the $90 between Nolan and Evan 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 Nolan Evan (al Stand-alone (b) Incremental Nolan primary user Evan primary user (c) Shapley