If Korea Is Capable of Producing Either Shoes or Soccer

question 108

Multiple Choice

If Korea is capable of producing either shoes or soccer balls or some combination of the two,then

• A)Korea should specialize in the product in which it has an absolute advantage.
• B)it would be impossible for Korea to have an absolute advantage over another country in both products.
• C)it would be difficult for Korea to benefit from trade with another country if Korea is efficient in the production of both goods.
• D)Korea's opportunity cost of shoes is the inverse of its opportunity cost of soccer balls.

Determine the payback period for investment projects.

Calculate simple rates of return on investments.

Understand the concept and calculation of Internal Rate of Return (IRR).

Analyze cash inflows and outflows to determine the feasibility of investment projects.

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Definitions:

Unit Sales

The total number of individual items or units that a company sells.

Margin of Safety

The difference between actual sales and sales at the break-even point, indicating the risk level of not covering fixed costs.

Break-Even Sales

The sum of money needed to offset all constant and fluctuating expenses, achieving a financial break-even point with no gains or deficits.

Current Sales

The total revenue generated from sales activities in the most recent accounting period.