The Roomba 980 Is a Robotic Vacuum Cleaner Made and Sold

question 80

Multiple Choice

The Roomba 980 is a robotic vacuum cleaner made and sold by iRobot. It can vacuum 4 rooms on a single battery charge and it costs $2 worth of electricity to charge the Roomba. Lynn is a house cleaner and can vacuum 4 rooms in 1 hour with a traditional vacuum. Suppose you want the 4 rooms in your house vacuumed once a week for one year. Ignoring the cost of any electricity Lynn uses, which method is economically efficient if Lynn charges $20 per hour? $30 per hour?

• A) Roomba if Lynn charges $20 per hour and Lynn if she charges $30 per hour
• B) Lynn if she charges $20 or $30 per hour
• C) Roomba if Lynn charges $20 or $30 per hour
• D) Lynn if she charges $20 per hour and Roomba if Lynn charges $30 per hour

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Definitions:

Inter-Entity Transactions

Transactions that occur between two entities within the same parent company structure, often involving transfers of assets, services, or funds.

NCI

Non-controlling interest, representing the portion of equity ownership in a subsidiary not attributable to the parent company.

Profit

The financial gain realized when the amount earned from business activities exceeds the expenses, costs, and taxes needed to sustain the activity.

Pre-Acquisition Entry

An accounting entry made to record the assets and liabilities of a company before it is officially acquired by another entity.