Table 3-10 Assume That Japan and Korea Can Switch Between Producing Cars

question 356

Multiple Choice

Table 3-10
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.
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-Refer to Table 3-10. Assume that Japan and Korea each has 2400 hours available. If each country divides its time equally between the production of cars and airplanes, then total production is

• A)40 cars and 8 airplanes.
• B)64 cars and 16 airplanes.
• C)80 cars and 16 airplanes.
• D)128 cars and 32 airplanes.

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Definitions:

Payback Period

Payback period is the amount of time it takes for an investment to generate an amount of cash flow equal to the original investment amount.

Net Cash Inflows

The amount of cash that a business receives over a period, minus the amount of cash outflows.

Inventory Cost

Inventory cost includes the costs associated with purchasing, storing, and managing goods that a business intends to sell; it typically comprises the purchase price, warehousing costs, and any other expenses related to holding inventory.

NPV Rule

The principle that an investment is considered acceptable if its net present value (NPV) is positive, under the context of discounted cash flow analysis.