3. ABC Computer Company has a 1400 million (Indian rupees) factory in Bangalore, India. During the current year ABC builds 140 million worth of computer components.

ABC’s costs are labor, 70 million; interest on debt, 7 million; and taxes, 14 million.

ABC sells all its output to XYZ Supercomputer.

Using ABC’s components, XYZ builds four supercomputers at a cost of 56 million each (components worth 35 million, labor costs of 14 million, and 7 million in taxes per computer). XYZ has a 2100 million factory.

XYZ sells three of the supercomputers for 70 million each. At year’s end, it had not sold the fourth.

The unsold computer is carried on XYZ’s books as a 56 million increase in inventory.

a. Calculate the contributions to GDP of these transactions, showing that all three approaches give the same answer.

b. Repeat part (a), but now assume that, in addition to its other costs, ABC paid 35 million for imported computer chips.