GDP Can Be Calculated by the Value-Added Approach, Which

question 184

Multiple Choice

GDP can be calculated by the value-added approach, which

• A)is useful in avoiding double counting.
• B)includes only the value-added portion from the sale of goods and services.
• C)includes the revenue a firm receives from selling a product minus the amount paid for goods purchased from other firms.
• D)All of the above correct.

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Definitions:

Operating Income

The profit realized from a business's core operations, excluding deductions of interest and taxes.

Net Cash Inflows

The total amount of cash that a company receives during a specific period, minus the cash expenditures.

Payback Period

The time it takes for an investment to generate an amount of income or cash flow to recoup the initial capital cost.

Net Present Value

Net present value (NPV) is a financial metric used to evaluate the profitability of an investment, calculated by subtracting the initial investment from the sum of all future cash flows discounted back to their present value.