Table 3-3 Assume That Japan and Korea Can Switch Between Producing Cars

question 42

Multiple Choice

Table 3-3
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.
-Refer to Table 3-3.Assume that Japan and Korea each has 2400 hours available.If each country divides its time equally between the production of cars and airplanes,then total production is

• A)40 cars and 8 airplanes.
• B)64 cars and 16 airplanes.
• C)80 cars and 16 airplanes.
• D)128 cars and 32 airplanes.

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Definitions:

Depreciation

Allocation of the cost of an asset over its useful life, recognizing the reduction in value due to wear and use.

Bid Price

The price at which a buyer is willing to purchase a security, currency, or commodity.

Discount Rate

It’s the interest rate applied for determining the current value of cash flows expected in the future through discounted cash flow analysis.

Depreciation Tax Shield

A reduction in taxable income that results from taking the depreciation expense as a tax deduction, thus reducing the firm's tax liability.