Refer to the Information Provided in Figure 4

question 135

Multiple Choice

Refer to the information provided in Figure 4.5 below to answer the questions that follow. Figure 4.5
-Refer to Figure 4.5. If the United States eliminates all taxes on CD-Rom drives, which of the following would occur?

• A) The price of CD-Rom drives in the United States would be $15 per CD-Rom drive, and the United States would import 3 million CD-Rom drives.
• B) The price of CD-Rom drives in the United States would be $25 per CD-Rom drive, and the United States would import 3 million CD-Rom drives.
• C) The price of CD-Rom drives in the United States would be $15 per CD-Rom drive, and the United States would import 9 million CD-Rom drives.
• D) The price of CD-Rom drives in the United States after the U.S. government eliminated all taxes on imported CD-Rom drives cannot be determined from this information.

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Definitions:

FIFO

First-In, First-Out; an inventory valuation method where goods first purchased or produced are sold or used first.

IFRS

International Financial Reporting Standards, which are a set of global accounting standards.

LIFO

Last-In, First-Out method, an inventory valuation technique where the latest items added to inventory are the first ones to be used or sold.

External Financial Reporting

The process of disclosing financial information to external stakeholders, such as investors or regulators, through reports like balance sheets and income statements.