This Table Shows How Much Cotton and Cocoa Can Be

question 76

Multiple Choice

This table shows how much cotton and cocoa can be produced in Peru and Brazil with one unit of equivalent resources. $$\begin{array}{l}\begin{array} { | l | l | l | } \hline & \begin{array} { l } \text { Cotton } \\\text { (bales) }\end{array} & \begin{array} { l } \text { Cocoa Beans } \\\text { (bushels) }\end{array} \\\hline \text { Peru } & 2 & 4 \\\hline \text { Brazil } & 1 & 6 \\\hline\end{array}\\\text { TABLE 33- } 4\end{array}$$
-Refer to Table 33- 4. The opportunity cost of a bushel of cocoa beans in Brazil is

• A) 1/2 bale cotton.
• B) 1 bale cotton.
• C) 2/3 bale cotton.
• D) 1/3 bale cotton.
• E) 1/6 bale cotton.

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Definitions:

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and earnings without increasing its financial leverage or equity financing.

Return On Equity

A measure of financial performance calculated by dividing net income by shareholders' equity, indicating how effectively management is using a company’s assets to create profits.

Payout Ratio

A financial metric that shows the proportion of earnings a company pays to its shareholders in the form of dividends.

Internal Growth Rate

The highest amount of growth achievable for a business without obtaining external financing, based solely on reinvestment of its earnings.