The Rationale Behind "Parity Pricing" Is to

question 21

Multiple Choice

The rationale behind "parity pricing" is to

• A) hold down retail food prices.
• B) keep farm incomes from falling below a certain minimum level.
• C) encourage farmers to find other occupations.
• D) give special aid to the small farmer.

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Definitions:

Average Accounting Return

A measure of the profitability of an investment, calculated as the average net income divided by the average book value of the investment.

Straight-line Depreciation

A method of allocating the cost of a tangible fixed asset over its useful life in equal annual installments.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenue.

Average Accounting Return

The ratio of the average net income that an investment generates to the average book value of the investment over its life.