When a Coffee Chain in Chicago Purchases Coffee from Colombia

question 28

Multiple Choice

When a coffee chain in Chicago purchases coffee from Colombia, South America, it

• A) is importing the coffee.
• B) is exporting the coffee.
• C) has an absolute advantage.
• D) is decreasing the balance-of-trade deficit.
• E) is making a big mistake.

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Definitions:

Income Tax Rate

The percentage of an individual's or corporation's income that is paid to the government as tax.

Net Profit

The financial gain remaining after subtracting all operating expenses, interest, taxes, and any other charges from total revenue.

Income Tax Rate

The rate at which an individual or business's income is taxed by the government, similar in essence to Tax Rate but specifically applied to income.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time.