Discounted cash flow methods for capital budgeting focus on cash inflows and the required rate of return. Option B.
These methods involve estimating the cash inflows from the investment over its useful life and discounting them back to the present using the required rate of return to determine whether the investment is worth pursuing.
Operating income and cost of capital, working capital and cost of capital, and operating income and required rate of return are not the primary focus of discounted cash flow methods for capital budgeting.
Hence, the right answer is option B. Cash inflows and required rate of return.
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Suppose an economy has a marginal propensity to consume of 0. 66 along with $38,039 consumption taking place when disposable income is $44,238. What would disposable income be if you observe a consumption level of $45,239?
The disposable income would be approximately $54,117.39 when the consumption level is $45,239.
To calculate the disposable income when consumption is $45,239, we can use the marginal propensity to consume (MPC) and the consumption function. Given MPC = 0.66, and consumption ($38,039) occurs at disposable income of $44,238, we can determine the autonomous consumption (C₀) using the formula: C = C₀ + MPC × Disposable Income Rearrange the formula to solve for C₀: C₀ = C - MPC × Disposable Income C₀ = $38,039 - 0.66 × $44,238 C₀ ≈ $9,523.12 Now, we have the autonomous consumption (C₀), and we can find the disposable income for the consumption level of $45,239: $45,239 = $9,523.12 + 0.66 × Disposable Income Rearrange the formula to solve for disposable income: Disposable Income = ($45,239 - $9,523.12) / 0.66
Disposable Income ≈ $54,117.39 Thus, the disposable income would be approximately $54,117.39 when the consumption level is $45,239.
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The total revenue of a purely competitive firm from selling 5 units of output is $50. Based on this information, the unit price of the output must be?a. $10. b. $45. c. $250. d. $55
The unit price of the output must be $10. This means that for each unit sold, the firm receives $10 in revenue, hence the correct answer is option A)
To determine the unit price of the output, we need to use the formula for total revenue, which is: Total revenue = Price per unit x Quantity sold Given that the total revenue of the firm from selling 5 units of output is $50, we can plug in the values and solve for the price per unit: $50 = Price per unit x 5 Price per unit = $50 ÷ 5 Price per unit = $10 Therefore, the unit price of the output must be $10. This means that for each unit sold, the firm receives $10 in revenue. It is important to note that in a purely competitive market, firms have no control over the price of their product as it is determined by the market demand and supply. Hence, the firm may need to adjust its production and pricing strategy to remain competitive in the market. Therefore the answer is correct option A) .
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On January 1, 2020, Walker Inc. Acquired equipment for $160,000. The expected useful life is 10 years and the residual value is $3,200. Total service hours for the equipment are estimated to be 40,000 while actual hours for 2020 were 3,600. Compute depreciation expense in 2020, under the following methods. Round your answer to the nearest dollar
To calculate the depreciation expense for 2020 under different methods, we need to consider the three common depreciation methods: straight-line, units of production, and double-declining balance.
Straight-line Method:
Depreciation Expense = (Cost - Residual Value) / Useful Life
Depreciation Expense = ($160,000 - $3,200) / 10
Depreciation Expense = $15,760
Units of Production Method:
Depreciation Expense per Hour = (Cost - Residual Value) / Total Service Hours
Depreciation Expense = Depreciation Expense per Hour * Actual Hours in 2020
Depreciation Expense per Hour = ($160,000 - $3,200) / 40,000
Depreciation Expense = ($156,800 / 40,000) * 3,600
Depreciation Expense = $14,112
Double-Declining Balance Method:
Depreciation Rate = 2 / Useful Life
Depreciation Expense = (Book Value - Accumulated Depreciation) * Depreciation Rate
Year 1:
Depreciation Expense = (Cost - Accumulated Depreciation) * Depreciation Rate
Depreciation Expense = ($160,000 - $0) * (2 / 10)
Depreciation Expense = $32,000
Year 2:
Depreciation Expense = (Cost - Accumulated Depreciation) * Depreciation Rate
Depreciation Expense = ($160,000 - $32,000) * (2 / 10)
Depreciation Expense = $25,600
Year 3:
Depreciation Expense = (Cost - Accumulated Depreciation) * Depreciation Rate
Depreciation Expense = ($160,000 - $57,600) * (2 / 10)
Depreciation Expense = $20,480
Therefore, the depreciation expense in 2020 is as follows:
Straight-line Method: $15,760
Units of Production Method: $14,112
Double-Declining Balance Method: $32,000 (assuming it is the first year)
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Grace Jones was just hired as an accounting intern at your company. Can you assist Grace and identify that profit will be the same under variable costing as under fuli absorption costing whenever Multiple Choice the number of units produced is the same as the number of units sold. the number of units produced is greater than the number of units sold variable costing is chosen for external reporting purposes the number of units produced is less than the number of units sold.
The profit will be the same under variable costing because under full absorption costing, the number of units produced is equal to the number of units sold. The Option A is correct.
When will profit be same under variable and full absorption costing?Under variable costing, only variable manufacturing costs are considered as product costs and fixed manufacturing costs are treated as period costs.
Under full absorption costing, its considers both variable and fixed manufacturing costs as product costs. Therefore, the difference in profit between these two methods arises due to the treatment of fixed manufacturing costs.
When number of units produced is equal to the number of units sold, there is no change in the inventory level and the fixed manufacturing costs are entirely expensed in the current period under both variable and full absorption costing.
Full question:
Grace Jones was just hired as an accounting intern at your company. Can you assist Grace and identify that profit will be the same under variable costing as under fuli absorption costing whenever Multiple Choice:
a. the number of units produced is the same as the number of units sold.
b. the number of units produced is greater than the number of units sold
c. variable costing is chosen for external reporting purposes
d. the number of units produced is less than the number of units sold.
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A firm's external financing need is financed by which of the following?A. net income and retained earningsB. net working capital and retained earningsC. retained earningsD. debt or equityE. owners' equity, including retained earnings
A firm's external financing need is typically financed by either debt or equity. Option D is correct.
External financing refers to obtaining funds from sources outside the company, such as borrowing money or issuing stock. Debt and equity are the two primary sources of external financing for a firm.
Debt financing involves borrowing money from lenders, such as banks or bondholders, and paying it back with interest. This can include short-term loans, such as lines of credit or accounts payable, or long-term loans, such as bonds or mortgages.
Equity financing involves selling ownership shares of the company to investors in exchange for funds. This can include issuing common stock, preferred stock, or other equity securities.
Therefore, option D is correct.
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The current equilibrium price and quantity in the market for walnuts are $5 per pound with 10,000 pounds supplied. Supermarkets are expecting to see price fall to $4 per pound due to an unusually large crop of walnuts. If the price elasticity of demand is 1.8, what is the new quantity demand for walnuts?
To calculate the new quantity demanded for walnuts, we can use the price elasticity of demand formula:
Elasticity = (% Change in Quantity Demanded) / (% Change in Price)
We are given the following information:
Current price (P1) = $5 per pound
New price (P2) = $4 per pound
Current quantity demanded (Q1) = 10,000 pounds
Price elasticity of demand (E) = 1.8
First, we need to calculate the percentage change in price and quantity demanded:
% Change in Price = (P2 - P1) / P1 = ($4 - $5) / $5 = -0.2 or -20%
% Change in Quantity Demanded = E * % Change in Price = 1.8 * (-20%) = -36%
Next, we calculate the new quantity demanded:
Q2 = Q1 * (1 + % Change in Quantity Demanded)
= 10,000 * (1 - 0.36)
= 10,000 * 0.64
= 6,400 pounds
Therefore, the new quantity demanded for walnuts at the price of $4 per pound is 6,400 pounds.
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If a country puts a tariff on imported watermelons, the effects will include:
If a country puts a tariff on imported watermelons, the effects will include a decrease in the quantity of watermelons imported into the country.
This will result in an increase in the price of watermelons in the country, as the supply of watermelons decreases and demand remains constant. However, this will not necessarily lead to an increase in exports of watermelons for the country, as other countries may also impose tariffs in response, making it harder to export.
The increase in prices for domestically produced watermelons may occur, as consumers will have fewer options for purchasing watermelons and may turn to domestically produced ones. However, this will depend on the domestic production capacity of the country. Overall, the effects of a tariff on imported watermelons will likely be a higher price for consumers, and potentially some benefits for domestic producers.
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Complete question:
If a country puts a tariff on imported watermelons, the effects will include:
A. an increase in its exports of watermelons.
B. a decrease in the price of watermelons in the country.
C. an increase in prices for domestically produced watermelons.
D. an expansion of its production possibilities frontier.
E. None of the above
a speculator in the futures market wishing to lock in a price at which they could ________ a foreign currency will ________ a futures contract.
A speculator in the futures market wishing to lock in a price at which they could buy or sell a foreign currency will enter into a futures contract.
A futures contract is an agreement between two parties to buy or sell a specific asset, such as a currency, at a predetermined price and date in the future. This allows the speculator to lock in a price and mitigate the risk of price fluctuations in the foreign exchange market. By entering into a futures contract, the speculator can guarantee the price at which they will be able to buy or sell the foreign currency, providing them with greater certainty and stability in their financial planning.
A speculator, who aims to profit from price fluctuations in the market, may want to lock in a specific price for buying a foreign currency to mitigate risk or take advantage of anticipated price movements. To achieve this, they will purchase a futures contract, which is a standardized legal agreement to buy or sell foreign currency at a predetermined price on a specific date in the future. By doing so, the speculator secures the desired price and hedges against potential unfavorable market fluctuations.
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Zorn Inc. makes a sale for $450. The company is required to collect sales taxes amounting to 10%. What is the amount that will be credited to the Sales Tax Payable account? A. $50. B. $225. C. $45. D. $41
The amount that will be credited to the Sales Tax Payable account is $45.
How to determine the credited to the Sales Tax Payable accountTo determine the amount that will be credited to the Sales Tax Payable account, we need to calculate 10% of the sale amount.
Sale Amount * Sales Tax Rate = Sales Tax Payable
Given that the sale amount is $450 and the sales tax rate is 10% (0.10), we can calculate the sales tax payable as follows:
$450 * 0.10 = $45
Therefore, the amount that will be credited to the Sales Tax Payable account is $45.
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for 1-year bond, suppose the face value is 100 and present value is 95, what is the yield of this bond?
The yield of this 1-year bond when face value is 100 and present value is 95 is 5.26%.
To calculate the yield of a 1-year bond with a face value of 100 and a present value of 95, you can use the following formula:
Yield = (Face Value - Present Value) / Present Value
Hence,
1: Identify the face value and present value.
Face Value = 100
Present Value = 95
2: Plug the values into the formula.
Yield = (100 - 95) / 95
3: Calculate the yield.
Yield = 5 / 95
Yield ≈ 0.0526 or 5.26%
So, the yield of this 1-year bond is approximately 5.26%.
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the benefits of decentralization i.e. delegation and assignment of decision rights include all of the following except:
a it forces top levels of management to focus on individual units
b it empowers more employees at lower levels of management
c it allows for better and more timely decision making
d it trains future managers
Decentralization is a management approach that involves the delegation and assignment of decision-making rights from top levels of management to lower levels of management. Option A
It is an effective way to empower employees and to improve decision-making processes within an organization. The benefits of decentralization include the following:
It empowers more employees at lower levels of management: Decentralization allows employees to take ownership of their work, to be more accountable, and to make decisions that are in the best interest of the organization. This, in turn, leads to improved job satisfaction, employee engagement, and better overall performance.
It allows for better and more timely decision-making: Decentralization ensures that decisions are made closer to where the work is being done. This leads to faster decision-making, improved responsiveness to changes in the market, and better coordination between different departments and teams.
It trains future managers: Decentralization provides employees with the opportunity to gain valuable management experience, which can help prepare them for future leadership roles within the organization.
However, one benefit of decentralization that is not accurate is that it forces top levels of management to focus on individual units. In fact, decentralization can free up top management to focus on the big picture and long-term strategy, rather than getting bogged down in day-to-day operations.
In conclusion, decentralization is a useful management approach that can help organizations improve decision-making, empower employees, and train future managers.
By delegating decision-making rights to lower levels of management, organizations can improve overall performance and become more adaptable to changes in the market. So Option A is correct.
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The benefits of decentralization i.e. delegation and assignment of decision rights include: forcing top levels of management to focus on individual units, empowering more employees at lower levels of management, allowing for better and more timely decision making, and training future managers.
Decentralization has numerous benefits for organizations. By delegating decision-making authority to lower levels of management, it can help to improve efficiency, foster innovation, and create a more engaged and empowered workforce. Additionally, it allows senior leaders to focus on strategic issues, while giving lower-level managers the flexibility to make decisions that are better informed and more timely. Finally, decentralization can also help to build a pipeline of future leaders by providing employees with the opportunity to develop their skills and gain valuable management experience
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Baxa Company has an accrual basis net income of $360,000 in 2019 and the following related items:Depreciation expense $76,000Accounts receivable increase 24,000Inventory decrease 28,000Accounts payable decrease 16,000How much is Baxa's net cash flow from operating activities in 2019?A. $424,000B. $348,000C. $472,000D. $416,000
The closest answer to this amount is D. $416,000. To calculate Baxa's net cash flow from operating activities in 2019, we need to adjust the accrual basis net income for non-cash items and changes in working capital.
Starting with the net income of $360,000, we add back the depreciation expense of $76,000 (since this is a non-cash expense) to get $436,000.
Next, we need to adjust for changes in working capital. Accounts receivable increased by $24,000, which means that cash collections were less than the amount of revenue recognized. Inventory decreased by $28,000, which means that Baxa sold more inventory than it purchased during the year. Accounts payable decreased by $16,000, which means that Baxa paid off some of its suppliers during the year.
To adjust for these changes, we subtract the increase in accounts receivable ($24,000) and the decrease in inventory ($28,000) from our net income + depreciation amount ($436,000). We also add back the decrease in accounts payable ($16,000).
Therefore, Baxa's net cash flow from operating activities in 2019 is:
$436,000 - $24,000 - $28,000 + $16,000 = $400,000
The closest answer to this amount is D. $416,000.
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During the summer months, Bruce's Market anticipates that the price of hot dogs will increase by 12%, and the demand for hamburgers will increase by 37%. The cross-price elasticity of demand between hamburgers and hot dogs is what?
During the summer months, the cross-price elasticity of demand between hamburgers and hot dogs at Bruce's Market is 3.08.
To provide a detailed explanation, we first need to understand the concept of cross-price elasticity of demand. Cross-price elasticity of demand measures the responsiveness of the quantity demanded for one good (in this case, hamburgers) to a change in the price of another good (in this case, hot dogs). It is calculated using the formula:
Cross-Price Elasticity of Demand = (% Change in Quantity Demanded of Good A) / (% Change in Price of Good B)
In the given scenario, the price of hot dogs is anticipated to increase by 12% during the summer months, while the demand for hamburgers is expected to increase by 37%. Plugging these values into the formula, we get:
Cross-Price Elasticity of Demand = (37% Increase in Quantity Demanded of Hamburgers) / (12% Increase in Price of Hot Dogs)
Cross-Price Elasticity of Demand = 37 / 12 = 3.08
Therefore, the cross-price elasticity of demand between hamburgers and hot dogs at Bruce's Market during the summer months is 3.08. This positive value indicates that hamburgers and hot dogs are substitute goods, meaning that when the price of hot dogs increases, the demand for hamburgers also increases.
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9......Water from the Mississippi river is an example of
A.
static resource.
B.
a renewable natural resource.
C.
a nonrenewable natural resource.
D.
capital
The answer to this question is B, a renewable natural resource. The Mississippi river is a source of freshwater that is constantly replenished by rainfall and snowmelt, making it a renewable resource.
This resource can be used for a variety of purposes, such as irrigation, drinking water, and industrial processes. It is important to manage this resource sustainably to ensure its long-term availability and to avoid depleting it faster than it can be replenished. In contrast, a static resource would be something like a piece of land or a mineral deposit that does not renew itself over time. Examples of nonrenewable resources include fossil fuels like coal, oil, and natural gas, which are finite and will eventually be depleted.
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Hi, I know this is last minute, but an interviewer just canceled on a candidate interview for your team. This candidate is already on-site and cannot be rescheduled. Would you be able to interview the candidate today
As an interviewer, you have just received a request to interview a candidate who is already on-site and cannot be rescheduled.
Check your schedule (1-2 minutes)location of the interview. (2-3 minutes)consider delegating the interview. (2-3 minutes)consider rescheduling the interview. (2-3 minutes)A broad inference (conjecture) is reached by the process of inductive reasoning, which entails critically evaluating a pattern that is based on a series of events or specific cases.
A reader might infer the meaning or message (information) connected with a subject in a literary work through a technique known as inference, particularly through induction.
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Your question is incomplete, but most probably the full question was.
Hi, I know this is last minute, but an interviewer just canceled on a candidate interview for your team. This candidate is already on-site and cannot be rescheduled. Would you be able to interview the candidate today.
Based on your current workload, John's activities for today, and the new interview request, consider what action you would take. The additional time required for each response is noted in parentheses.
Disney intends to compete against Netflix, Amazon, and other streaming services by
A. increasing subscription prices.
B. diversifying its operations.
C. teaming up with other suppliers.
D. outsourcing its distribution.
Disney intends to compete against Netflix, Amazon, and other streaming services by D. outsourcing its distribution
Disney intends to compete against Netflix, Amazon, and other streaming services primarily by diversifying its operations. Disney has made significant investments in content creation, particularly through its acquisition of 21st Century Fox and its Marvel and Star Wars franchises.
It has also launched its own streaming service, Disney+, which features its vast library of movies and TV shows, as well as original programming. Additionally, Disney has leveraged its theme parks, merchandise sales, and other businesses to create cross-promotional opportunities for its streaming service.
This multi-pronged approach allows Disney to not only compete on content, but also on branding and customer loyalty. While it is possible that Disney may increase subscription prices over time, Option D
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You are earning 5.2% on a certificate of deposit. Inflation is running 3.5%. What is the real rate of return on your investment? Carry all interim calculations to 5 decimal places and then round your final answer to 2 decimal place. The tolerance is +-0.05.
The real rate of return on your investment is essentially the amount of money you're earning after taking inflation into account. In this scenario, you are earning 5.2% on a certificate of deposit, but inflation is running at 3.5%.
To calculate the real rate of return, we need to subtract the inflation rate from the earned interest rate. So, we'll start by subtracting 3.5% from 5.2%:
5.2% - 3.5% = 1.7%
This means that the real rate of return on your investment is 1.7%. However, it's important to note that this is a nominal rate and does not take into account taxes or any other fees associated with your investment.
It's also important to understand that inflation can erode the value of your investment over time, as the cost of goods and services increases. So, while you may be earning a positive return on your investment, you may not necessarily be increasing your purchasing power.
Overall, the real rate of return on your investment is 1.7%, after taking inflation into account. This means that you are earning more than the rate of inflation, but it's important to continue monitoring your investment to ensure that it's keeping up with your financial goals and needs.
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the aw of aoc usually decreases over the years.True/False
The given statement " the law of AOC (Area of Control) usually decreases over the years" is true because AOC refers to the area in which a business has control and dominance over its operations, including customers .
In the initial stages of a business, it may have a strong AOC, but over time, it may face increasing competition and market saturation, resulting in a decrease in its AOC.
This decline in AOC can occur due to various reasons, including increased competition from new entrants, changing market trends, evolving customer preferences, and disruptive technologies.
As the industry matures, the competition intensifies, and the market becomes more saturated, businesses may find it challenging to maintain their AOC. In some cases, businesses may even lose control of their market position and become less relevant over time.
To maintain their AOC, businesses need to continuously adapt and innovate to stay ahead of the competition. They need to invest in research and development, improve their products and services, and find new ways to reach and engage with their customers.
By doing so, they can not only maintain but also grow their AOC over time, and stay relevant in the ever-changing business landscape.
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A wide variety of firm resources that are costly to imitate due to the social engineering that is required being beyond the capability of competitors include interpersonal relations among managers in the firm, its culture, and its reputation with its suppliers and customers. Such competitive advantages are based upon
a combination of intangible assets and organizational capabilities.
Intangible assets refer to non-physical resources that provide value to a firm but are not easily quantifiable or visible. Examples of intangible assets in this context could include the interpersonal relations among managers, the firm's culture, and its reputation with suppliers and customers. These intangible assets are valuable because they are difficult for competitors to replicate or imitate.
Organizational capabilities, on the other hand, refer to the firm's ability to utilize its resources effectively and efficiently. In this case, the firm's capability to foster strong interpersonal relations among managers, cultivate a unique and strong culture, and maintain a favorable reputation with suppliers and customers contributes to its competitive advantage.
The combination of these intangible assets (interpersonal relations, culture, reputation) and organizational capabilities (ability to leverage and utilize these assets) creates a competitive advantage for the firm. Competitors may find it challenging to imitate or replicate these resources due to the complexity involved in social engineering and building such valuable relationships and reputation.
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Estate planning benefits a property owner and his or her family by which of the following? Indicate all correct answers.
A. Allowing the decedent to avoid federal, state, and local income taxes on income earned by the decedent in the last year of their life.
B. If properly done, minimizing estate taxes.
C. Preventing creditors who were owed money by the decedent prior to the decedent's death from recovering any money from the decedent's estate after the decedent's death.
D. Enabling supervision of the estate under federal probate law.
E. Eliminating the need for formal legal documents.
F. Ensuring a person's property is distributed as he or she wishes after death.
Estate planning provides several benefits for property owners and their families. First and foremost, it ensures that a person's property is distributed according to their wishes after death. This can be particularly important for individuals who have complex family situations or significant assets. Option C
Estate planning can also help minimize estate taxes, which can save the decedent's heirs a significant amount of money. Proper estate planning can also help prevent creditors from recovering money from the decedent's estate after their death.
Additionally, estate planning can enable the supervision of the estate under federal probate law, which can help ensure that the decedent's wishes are followed and that the process is carried out smoothly. Estate planning does not eliminate the need for formal legal documents, but it can help simplify the process and reduce the burden on the decedent's family.
Overall, estate planning is a critical step for any property owner who wants to ensure that their assets are protected and their wishes are carried out after their death. Option C
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ch 10 kb. the primary source of information used in setting the budget in a bottoms-up approach is
In a bottoms-up budgeting approach, the primary source of information used to set the budget is data and feedback gathered from the lower-level departments or units within an organization.
This approach involves breaking down the budget process into smaller components, where each department is responsible for estimating its own budget needs and submitting them to the higher-level management for review and approval.
The main advantage of a bottoms-up budgeting approach is that it allows for a more accurate and detailed budget estimation process, as those closest to the day-to-day operations of the business are responsible for providing their own budget needs.
This helps to ensure that all necessary expenses and resources are accounted for, and potential budgetary constraints are identified early in the process.
Additionally, this approach fosters a sense of ownership and accountability among department heads and employees, as they are directly involved in the budget planning process.
This can lead to increased motivation and engagement, as well as a more efficient use of resources.
Overall, a bottoms-up budgeting approach provides a comprehensive and inclusive way to set the budget, as it leverages the knowledge and expertise of those closest to the operations of the business.
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THE 6 MONTH FORWARD RATE BETWEEN THE BRITISH POUND AND THE US DOLLARS IS 1.38 PER POUND IF THE 6 MONTH RATES ARE 2% IN THE UNITED STATES AND 100 BASIS POINTS HIGHER IN ENGLAND WHAT IS THE CURRENT EXCHANGE RATE?
The current exchange rate is 1.3558 US dollars per British pound.
We can use the formula:
F = S x (1 + rdomestic x t) / (1 + rforeign x t)
where:
F = Forward exchange rate
S = Spot exchange rate
rdomestic = domestic interest rate
rforeign = foreign interest rate
t = time in years
Using the given information, we have:
F = 1.38 (6-month forward rate)
rdomestic = 2% (6-month rate in the US)
rforeign = 3% (100 basis points higher than the US rate)
t = 0.5 (6 months)
Plugging in the values:
1.38 = S x (1 + 0.02 x 0.5) / (1 + 0.03 x 0.5)
Solving for S:
S = 1.38 x (1 + 0.03 x 0.5) / (1 + 0.02 x 0.5)
S = 1.3558
Therefore, the current exchange rate is 1.3558 US dollars per British pound.
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Indicate whether each of the following costs should be classified as a product cost or as an SG&A cost in accordance with GAAP. a. Wages paid to workers in a manufacturing plant. b. The salary of the receptionist working in the sales department. c. Supplies used in the sales department. d. Wages of janitors who clean the factory floor. e. The salary of the company president. f. The salary of the cell phone manufacturing plant manager. g. The depreciation on administrative buildings. h. The depreciation on the company treasurer's computer. i. The fabric used in making a customized sofa for a customer. j. The salary of an engineer who maintains all manufacturing plant equipment.
Product costs are those directly associated to the manufacturing of a for-sale product or service. Period costs include all other indirect costs incurred during manufacturing.
Period costs include things like overhead and sales and marketing charges. The costs of medications provided in the operation room, the attending physician's fees, and a percentage of the hospital's liability insurance for the delivery room. Its product prices could include: Direct material:
The price of the wood used to make the tables. Direct labor: The salary and perks paid to carpenters to build the tables. Manufacturing overhead (indirect material): The cost of nails used to join the tables.
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Aztec Company contracted with the Kirk Company to review their revenue recognition policies for recording sales. The contract will pay Aztec $800,000 in the form of a fixed fee. Aztec will also receive $150,000 additionally if Kirk achieves $200,000 in additional revenues. Aztec estimates a 60% chance that Kirk will achieve $200,000 in additional revenues. Aztec estimates the transaction price using the probability weighted amount of expected consideration (Ignore any constraints on variable consideration). The transaction price is ________
The transaction price for the contract between Aztec Company and Kirk Company is calculated using a probability-weighted approach based on the expected consideration. The transaction price consists of a fixed fee of $800,000 and a contingent additional payment of $150,000 if Kirk achieves $200,000 in additional revenues. Aztec estimates a 60% chance of Kirk achieving the additional revenues.
To determine the transaction price, Aztec Company considers the potential variable payment of $150,000 and the probability of it occurring. Since there is a 60% chance that Kirk Company will achieve $200,000 in additional revenues, Aztec assigns a probability of 0.6 to the contingent payment.
The expected consideration for the contingent payment is calculated as follows: $150,000 (contingent payment) multiplied by 0.6 (probability of achievement) equals $90,000.
Therefore, the transaction price is the sum of the fixed fee of $800,000 and the expected consideration of the contingent payment, which is $90,000. Thus, the total transaction price for the contract between Aztec Company and Kirk Company is $890,000.
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Which strategy to reduce overall costs and expenditures creates the most criticism and anxiety? O reducing the workforceO simplifying products and processesO decreasing quality and promises in service delivery O developing other mechanisms for eliminating resources or nonperforming assets
Reducing the workforce is typically the strategy that creates the most
criticism and anxiety.
This is because reducing the workforce often involves layoffs or
downsizing, which can lead to job loss, financial instability, and emotional
stress for the affected employees.
It can also have a negative impact on the morale and productivity of the
remaining employees who may feel insecure about their own job security.
As a result, reducing the workforce is often a difficult decision that should
be made carefully, with consideration given to the potential impacts on
both the organization and its employees.
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an increase in aggregate demand along the keynesian (flat) portion of aggregate supply results in increased gdp and a higher average price level.
In the Keynesian model, an increase in aggregate demand along the flat portion of the aggregate supply curve leads to an increase in real output or GDP, but it also results in an increase in the average price level.
This is because the flat portion of the aggregate supply curve represents the economy's level of output when there is significant unused capacity or idle resources, such as unemployed workers or underutilized factories.
When aggregate demand increases, firms respond by increasing production to meet the higher demand, using up the excess capacity. Initially, this increase in output occurs without much change in the price level, but as the level of output approaches the economy's potential output, the production costs start to rise, and firms begin to raise their prices. This results in a higher average price level.
However, the extent to which an increase in aggregate demand affects the price level depends on the degree of spare capacity in the economy. If the economy is already operating at or near its potential output, an increase in aggregate demand may result in a much smaller increase in output and a much larger increase in prices, as firms have less spare capacity to utilize.
Overall, the Keynesian model highlights the importance of demand-side factors, such as government spending and consumption, in determining the level of output and prices in an economy. However, the model also recognizes that inflationary pressures may arise when the economy approaches full capacity utilization.
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unemployment compensation programs are called automatic stabilizers because payments increase during
Unemployment compensation programs are called automatic stabilizers because payments increase during economic downturns.
What is the reason?When the economy experiences a recession, businesses lay off employees, and people lose their jobs. As a result, the number of people applying for unemployment benefits increases.
These benefits provide financial assistance to individuals who have lost their jobs, and the increased spending helps to stimulate the economy.
This increased spending can help to mitigate the negative effects of the recession by keeping businesses afloat, preventing further job losses, and stabilizing consumer spending.
Thus, the unemployment compensation programs act as an automatic stabilizer for the economy, providing a safety net during tough economic times.
Hence, the answer is economic downturns.
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the economic question of 'what to produce' is about decisions related to
The economic question of 'what to produce' is primarily concerned with the allocation of resources towards the production of goods and services.
This economic question refers to the process of selecting the most valuable goods and services to be produced within an economy. It is important for producers to consider a variety of factors, such as consumer demand, resource availability, and profitability, when making decisions about what to produce. Producers must also take into account external factors, such as government regulations and global economic trends, when deciding what to produce.
In order to make informed decisions, producers often conduct market research to determine consumer preferences and purchasing behaviors. They also analyze data on production costs and revenue to determine the profitability of various products. Ultimately, the goal is to produce goods and services that will satisfy consumer demand while generating a profit for the producer.
In conclusion, the economic question of 'what to produce' is a critical consideration for producers in any economy. By carefully analyzing market trends and production costs, producers can make informed decisions that maximize profits while meeting consumer demand.
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The Baldwin Company has just issued $6,488,751 in dividends last year. The effect of this payment on the balance sheet is: Select: 1 Equity will decrease $6,488,751 Liabilities will increase $6,488,751 Expenses will increase $6,488,751 Net Profit will decrease $6,488,751
The effect of the dividend payment on the balance sheet is that equity will decrease by $6,488,751.
Dividends are distributions of a company's earnings to its shareholders. When a company pays dividends, it decreases its retained earnings, which is a component of equity on the balance sheet. Therefore, the main effect of the $6,488,751 dividend payment by the Baldwin Company is a decrease in equity by that amount. It does not affect liabilities or expenses directly, nor does it decrease net profit, as dividends are paid out of profits that have already been earned.
When a company issues dividends, it distributes a portion of its earnings to its shareholders. This payment reduces the company's retained earnings, which is a component of equity. Therefore, equity will decrease by the amount of the dividends paid, in this case, $6,488,751.
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Capital allocation is how an investor diversifies a portfolio:
between riskless and risky assets.
None of the explanations is correct.
among investments in each asset class.
among asset classes and markets.
1 points
QUESTION 10
A U.S. Treasury bond is yielding !% and a corporate bond is yielding 35 basis points above the Treasury. What is the yield on the corporate bond?
36%
0.65%
None of the answers is correct.
1.25%
1.35%
Basis point is one-hundredth of a percent, so 35 basis points is equivalent to 0.35%. If the U.S. Treasury bond is yielding 1%, then the corporate bond is yielding 1% + 0.35% = 1.35% hence option E) is correct.
Basis point is one-hundredth of a percent, so 35 basis points is equivalent to 0.35%. If the U.S. Treasury bond is yielding 1%, then the corporate bond is yielding 1% + 0.35% = 1.35%. To calculate this, we simply add the 35 basis points to the yield of the U.S. Treasury bond. This is because the corporate bond is yielding a premium above the Treasury bond to compensate for the additional risk that investors are taking on by investing in a corporate bond. It is important for investors to consider the risk associated with corporate bonds, as they typically carry a higher risk of default compared to U.S. Treasury bonds. As such, investors demand a higher yield to compensate for the additional risk. The yield differential between a corporate bond and a U.S. Treasury bond is known as the credit spread. Overall, investors should carefully consider their risk tolerance and investment objectives before deciding to invest in corporate bonds or any other type of fixed income securities. It is also important to keep in mind that yields can fluctuate over time, depending on market conditions and other factors. Therefore, the answer is (e) 1.35%.
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