-Refer to the Above Table

question 249

Multiple Choice

-Refer to the above table. Country A has a per capita real GDP of $1000 and B has a per capita real GDP of $10,000. A is growing at a rate of 5 percent a year and B at a rate of 4 percent a year. After 50 years, how much larger is per capita real GDP in B than A? How much is this in real dollars?

• A) B is 8 times larger, or $175,000 larger on a real per capita basis.
• B) B is 12 times larger, or $230,000 larger on a real per capita basis.
• C) B is a little over 6 times larger, or almost $60,000 larger on a real per capita basis.
• D) B is a little less than 2 times smaller, or almost $20,000 smaller on a real per capita basis.

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Definitions:

Receivables Collected

The amount of money received from customers in payment of accounts receivable during a given period.

Allowance Method

An accounting technique used to estimate uncollectible accounts receivable and adjust the balance of accounts.

Uncollectible Accounts

Accounts receivable that are considered unlikely to be collected and written off as a loss.

Quality of Receivables

An assessment of the likelihood that the receivables will be collected on time, reflecting the creditworthiness of a company's customers.