Conway Corporation and Philips Company are computer companies. Comparative data for 20X1 and 20X3 are given below.
Assume that each 20X1 dollar is equivalent to 1.45 of the 20X3 dollars, due to inflation.
-What is Philips' revenues per employee in terms of 20X3 dollars?
A) $892.31
B) $615.39
C) $790.91
D) $545.45

Question

Conway Corporation and Philips Company are computer companies. Comparative data for 20X1 and 20X3 are given below.
  Assume that each 20X1 dollar is equivalent to 1.45 of the 20X3 dollars, due to inflation.
-What is Philips' revenues per employee in terms of 20X3 dollars?
A) $892.31 
B) $615.39 
C) $790.91 
D) $545.45

Quizplus · Accepted Answer

We need to calculate Philips' revenues per employee in terms of 20X3 dollars.

In 20X1, Philips' total revenue was $9,000,000, and the number of employees was 1,000. So, the revenue per employee was:

Revenue per employee in 20X1 = Total revenue / Number of employees
Revenue per employee in 20X1 = $9,000,000 / 1,000
Revenue per employee in 20X1 = $9,000

Now, we need to convert this amount to 20X3 dollars, using the inflation factor:

Revenue per employee in 20X3 = Revenue per employee in 20X1 x Inflation factor
Revenue per employee in 20X3 = $9,000 x 1.45
Revenue per employee in 20X3 = $13,050

Therefore, Philips' revenues per employee in terms of 20X3 dollars is $790.91 (rounded to two decimal places).

The best choice is C.

Conway Corporation and Philips Company Are Computer Companies