Scenario 20

question 36

Multiple Choice

Scenario 20.2 Suppose labor productivity differences are the only determinants of comparative advantage,and both Egypt and produce only corn and cocoa.In Egypt,10 bushels of corn or 15 pounds of cocoa can be produced in a day.In Ghana,one day of labor can be used to produce either 2 bushels of corn or 8 pounds of cocoa.
-Refer to Scenario 20.2.Egypt will be willing to trade corn for cocoa if in the international market 1 bushel of corn can be exchanged for:

• A)more than 1 pound of cocoa.
• B)less than 1 pound of cocoa.
• C)more than 1.5 pounds of cocoa.
• D)less than two-third of a pound of cocoa.
• E)more than half a pound of cocoa.

Appreciate the significance of the tax rate on the calculation of consolidation adjustments.

Understand the accounting treatment for changes resulting in the loss of control of a subsidiary.

Understand the concept and importance of non-controlling interest (NCI) in consolidated financial statements.

Identify and describe the components and presentation of the consolidation worksheet, including adjustments for NCI.

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Definitions:

Expected Real Rate

The anticipated return on an investment after adjusting for inflation, representing the true growth of purchasing power.

Ownership

The legal right to possess, use, and dispose of anything ranging from physical goods to intellectual property.

Diverse Set

A collection characterized by a wide range of different elements, often referring to variety in demographics, ideas, or characteristics.

Standard & Poor's 500

An index tracking the performance of 500 major companies traded on U.S. stock exchanges.