A Company Produces a Computer

question 138

Multiple Choice

A company produces a computer.It pays $100 for the keyboard and outer case,$200 for the internal hardware,and $100 for the software.It sells it to a consumer for $500.The contribution to GDP is:

• A) $400.
• B) $500.
• C) $100.
• D) $900.
• E) $800.

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Definitions:

Price/Earnings Ratio

A valuation metric for stocks calculated by dividing the market price per share by the earnings per share, indicating how much investors are willing to pay per dollar of earnings.

Stock Market

A marketplace where shares of public companies are traded between investors.

Receivable Turnover Ratio

A financial metric that measures how efficiently a company collects cash from its customers by comparing net credit sales to average accounts receivable.

Return On Assets

A profitability ratio that measures how efficient a company is at using its assets to generate earnings, calculated as net income divided by total assets.