Q3. ABC Computer Company has a $20,000,000 factory in Silicon Valley. During the current year ABC build $2,000,000 worth of computer components. ABC costs are labour $1,000,000; interest on debt $100,000 and taxes $200,000.

ABC sells all its output to XYZ Supercomputers using ABC components. XYZ builds four supercomputers at a cost of $800,000 each ($500,000 worth of components, $200,000 in labour cost; and $100,000 in taxes per computer). XYZ has a $30,000,000 factory.

XYZ sells three of the supercomputers for $1,000,000 each. At year end, it had not sold the fourth. The unsold computer is carried on XYZ books an an $800,000 increase in inventory.

a. calculate the GDP using income based and valued added methods.

b. Repeat part a, but now assume that,in addition to its other costs, ABC paid $500,000 for imported computer chip.