Last Year, Which Is Used as the Base Year, a Firm

question 77

Multiple Choice

Last year, which is used as the base year, a firm had cash of $52, accounts receivable of $223, inventory of $509, and net fixed assets of $1,107. This year, the firm has cash of $61, accounts receivable of $204, inventory of $527, and net fixed assets of $1,216. What is this year's common-base-year value of inventory?

• A) 0.67
• B) 0.91
• C) 0.88
• D) 1.04
• E) 1.18

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Definitions:

Labor

The human effort, either physical or mental, that is used in the production of goods and services.

Capital

Financial assets or the financial value of assets, such as cash and goods, used to generate wealth through investment or production.

Marginal Product

The additional output resulting from a one-unit increase in the use of a variable input, holding all other inputs constant.

Price of Labor

The compensation received by employees for their work, often influenced by factors like skill, industry demand, and geographic location.