Question
In year one, Adam earns $1,000 and saves $100. In year 2, Adam gets a $500 raise so that he earns a total of $1,500.
In year one, Adam earns $1,000 and saves $100. In year 2, Adam gets a $500 raise so that he earns a total of $1,500. Out of that $1,500, he saves $200. What is Adam's MPC out of his $500 raise?
a. 0.50.
b. 0.75.
c. 0.80.
d. 1.00.
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Fundamental Managerial Accounting Concepts
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