Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / QUESTION 2 An Australian car manufacturer buys components from Japan for $10,000
QUESTION 2 An Australian car manufacturer buys components from Japan for $10,000. The car manufacturer uses half of those components in the production of a car, and stores the rest of the components. The car is sold to a local resident for $20,000. Then: The value added of the car manufacturer increases by $15,000 and its profits increase by $15,000. The value added of the car manufacturer increases by $10,000 and its profits increase by $10,000. The value added of the car manufacturer increases by $15,000 and its profits increase by $10,000. The value added of the car manufacturer increases by $20,000 and its profits increase by $15,000.
Value added can be defined as the difference between a product's selling price and the direct and indirect input used in making that product.in the given case value added=20000-5000=$15000.
Answer is a i.e.. the value added of the car manufacturer increases by $15000 and its profit increase by $15000
As he only uses half of the component worth $5000 and stores the rest of the components,
