The real interest rate is simply nominal interest rate
less the inflation rate. In equation form this is equivalent to:
Real interest rate = Nominal rate – Inflation Rate
Real interest rate = 9% - 4%
Real interest rate = 5%
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Answer:
Minimum Transfer Price is $3.50
Explanation:
The Minimum transfer price is calculated by adding the variable cost per unit with the opportunity cost. In this case where the clock division is not operating at full capacity then the opportunity cost would be considered as $0.
Moreover, the division would be able to avoid a $0.5 cost per clock. Therefore, the variable cost will be $3.50 ($4 - $0.5) after eliminating the $0.5.
Finally, the minimum transfer would as follows:
Minimum Transfer Price = Variable cost + Opportunity Cost
Minimum Transfer Price = $3.50 + $0
Minimum Transfer Price = $3.50
Answer:
the present value is $467,335.2613
Explanation:
The computation of the value worth today is shown below:
= Amount in two years ÷ (1 + rate of interest)^number of years
= $590,000 ÷ (1 + 12% ÷ 2)^2×2
= $590,000 ÷ 1.06^4
= $590,000 ÷ 1.26247696
= $467,335.2613
Hence, the present value is $467,335.2613
We simply applied the above formula so that the correct value could come
And, the same is to be considered
<span>The cell phone company is participating in strategic outsourcing. When a business uses strategic outsourcing they are outsourcing a part of their company operations to another company. By doing this, they are able to focus more on their core company goals and let another company handle the outside work of making it happen. </span>
Answer: Im not doing the math but Option 2 is the better option
Explanation:
