Scenario 4.1 CANOES-R-US Makes Canoes.It Buys the Shell of the Canoe from Canoe

question 270

Multiple Choice

Scenario 4.1
CANOES-R-US makes canoes.It buys the shell of the canoe from another firm for $300 and uses its labour and intermediate goods to make the canoe.It sells the finished canoe to a retail canoe store for $800.The retail canoe store then sells the canoe to a consumer for $1,200.
-Refer to Scenario 4.1.The value added of CANOES-R-US for each canoe equals

• A)$1,200.
• B)$800.
• C)$500.
• D)$400.
• E)$300.

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Definitions:

Straight-Line Depreciation

An approach to apportion the expense of a tangible resource over its effective life period in consistent annual installments.

Incremental Cash Flow

The additional cash flow a company receives from undertaking a new project, distinct from its existing cash flow.