A. Vending Machine is a nonstore retailer
Answer: 1.67 years
Explanation:
Pay back period calculates the amount of years the cumulative cash flows from an investment equals the amount of money invested.
The table attached explains how the payback was calculated.
The $3600 cost of the cart would be recouped between the first and second years. Therefore, it would be calculated as 1 year + $2400 / $3600 = 1.67 years
I hope my answer helps you.
Answer: the substitution bias
Explanation: The substitution bias shows the tendency of consumers of buying less costly good in place expensive one.
In the given case when the price of apple rises and the price of oranges falls then the consumer will purchase more of the oranges. In such a scenario the index will rise showing that the good which was purchased earlier by the consumers has risen however in the real world the consumer shave sifted their demand to a less expensive product.
Thus, it will lead to overstatement of substitution bias.
Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.