Assume that you are living in Dar Es Salaam, Tanzania and yourfriend, Safari in Rwanda invites you to visit him. Safari is sogenerous , he has promised you to pay your flight to Kigali to seehim, The round trip Dar – Kigali airfare costs $ 1,200. A weeklater, your friend Mukai, from Nairobihears from Safari that youwill be going to Kigali. She also decides to invite you to come tosee her in Nairobi and offers to reimburse you as well. The DarNairobi round trip airfare costs $ 800. You decide to combine thetwo trips into one big trip: Dar- Nairobi – Kigali- Dar that willcost $ 1,500 in airfare and save them $ 500 had it been that youhad visited them separately. Required: Using the stand alonemethod, the incremental method and the shapley value method ofallocating common costs, show how much cost of the $ 1,500 do youallocate to each of them separately.
