Narrative 3-1 IBM Has a Long-Standing "Reinventing Education" Program,which Involves Intensive Research

question 146

Multiple Choice

Narrative 3-1
IBM has a long-standing "Reinventing Education" program,which involves intensive research into how educational institutions can use the fruits of new technologies to transform what they do and thereby improve education. In the process,the program is helping to shape a market of significant interest to IBM. IBM views the program as an investment rather than as a charitable contribution.
-A small manufacturer of scented candles has asked if acting socially responsible would increase its profitability. Which of the following is the most correct response?

• A)Yes. Look at the examples of Starbucks Coffee and Ben & Jerry's. 
• B)Yes. There is strong evidence of a positive relationship between social responsibility and economic performance. 
• C)No. Stakeholders do not support social responsibility if it lowers profits. 
• D)No. There is no guarantee that profitability results from social responsibility.

Understand the concept of compound interest and its applications.

Calculate the future value of investments using the formula for compound interest.

Determine the present value of future amounts to achieve specific financial goals.

Apply concepts of time value of money in various financial planning scenarios.

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Definitions:

Price Buyers Pay

The amount of money that consumers are required to pay to acquire a good or service.

Price Sellers Receive

The amount of money that producers get from selling one unit of a good or service, after considering all costs and expenses.

Consumer Surplus

The dissimilarity in what consumers intend to pay for a good or service versus what they actually spend.

Producer Surplus

The disparity between the minimum amount sellers are ready to take for a product or service and the actual price they get in the market.