Nagel Corporation and Connors Company are computer companies. Comparative data for 20X1 and 20X5 are given below.
Assume that each 20X1 dollar is equivalent to 1.60 of the 20X5 dollars, due to inflation.
-What is Nagel's 20X5 productivity measure in terms of revenues per employee?
A) $2,240.00
B) $1,400.00
C) $1,428.57
D) $1,200.00

Question

Nagel Corporation and Connors Company are computer companies. Comparative data for 20X1 and 20X5 are given below.
  Assume that each 20X1 dollar is equivalent to 1.60 of the 20X5 dollars, due to inflation.
-What is Nagel's 20X5 productivity measure in terms of revenues per employee?
A) $2,240.00 
B) $1,400.00 
C) $1,428.57 
D) $1,200.00

Quizplus · Accepted Answer

To calculate Nagel's 20X5 productivity measure in terms of revenues per employee, we need to divide the total revenues in 20X5 by the number of employees in 20X5. 
Nagel's total revenues in 20X5 = $5,120,000
Nagel's number of employees in 20X5 = 4,000
So, Nagel's productivity measure in terms of revenues per employee = $5,120,000/4,000 = $1,280.00
However, we need to adjust this value for inflation by multiplying it by the inflation factor of 1.60.
Adjusted productivity measure = $1,280.00 x 1.60 = $2,048.00
Therefore, the answer is not one of the given options. However, the closest option is C ($1,428.57), so that would be the best choice to select.

Nagel Corporation and Connors Company Are Computer Companies