All categories

1 year ago

In terms of the build-borrow-or-buy framework, a firm's internal resources are considered to be relevant when they are:___.

1 answer:

6 0

In build-borrow-or-buy framwork,a firm's internal resources are considered to be relevant when they are of capital in nature.

Given an incomplete sentence related to build- borrow-or-buy framework.

We are required to fill the sentence so that we will get an appropriate meaning of the sentence.

In build-borrow-buy-framework a company needs to determine whether it has to fulfil its empty or semi empty resources through building the resources, borrow the resources or simply buy the resources.

In build-borrow-buy- framework the company needs to keep in mind the decision when the resources are capital in nature because it involves huge money and it involves huge risk.

When company has to build the capital asset then it involves huge cost and the company needs to determine its budget.

When company has to borrow the capital asset then there is less requirement of funds at one point of time. For example: rent of asset,etc.

When company has to buy the capital asset then the company needs to determine how many years that asset can give the company.

Hence in build-borrow-or-buy framework,a firm's internal resources are considered to be relevant when they are of capital in nature.

Learn more about build-borrow-or-buy framework at brainly.com/question/15288914

#SPJ4

You might be interested in

When ethan suspended brittany for two months without pay for violating the company's code of conduct, he was exercising ______ p

12345 [234]

He is exercising coercive power. Coercive power is the ability to influence someone's decision making by taking something away as punishment or threatening punishment if the person does not follow instructions. It can be a severe way to get staff members to follow along with a company plan, but it can be necessary in some cases.

3 0

3 years ago

A minimum acceptable rate of return for an investment decision is called the: Multiple Choice Internal rate of return. Average r

spayn [35]

Answer:

Hurdle rate of return.

Explanation:

A hurdle rate can be regarded as minimum rate of return that is been required by an investor or manager

on a particular project or investment.

The hurdle rate gives the description of the appropriate compensation as regards level of risk present. There are

higher hurdle rates associated with riskier projects.

It should be noted that A minimum acceptable rate of return for an investment decision is called the Hurdle rate of return.

6 0

3 years ago

What is the prime rate? a. the prime rate is the best interest rate that banks offer their most creditworthy customers. b. the p

trapecia [35]

Prime rate is (a) the best interest rate that banks offer their most creditworthy customers.

A prime rate is decided by the bank to lend money to its customers where the credit giving is decided on the basis of the credit history and points on the customers formally known as the credit rate of investment.

It totally depends upon the allowance of credit by financial institutions and then the payment made by the loan taking customers within a stipulated time frame.

To learn more about prime rate here,

brainly.com/question/28235888

#SPJ1

3 0

1 year ago

North Bank has been borrowing in the U.S. markets and lending abroad, thereby incurring foreign exchange risk. In a recent trans

Vsevolod [243]

Answer:

A) 10.82%

B) 5.27%

C) 8.56%

Explanation:

Given data :

North Bank Borrow ; $1.4 million at 5 percent

Lend in pounds at 9%

spread = ( 4% )

spot rate = 1.454

A) Determine the loan rate to maintain the 4 percent spread

Expected spot rate = 1.43

First step :

Lending amount = $1.4 million / initial spot rate = 1.4 / 1.454 = £ 0.9628 million

calculate the final amount Required in $ to maintain 4% Spread

= principal ( $1.4 million ) + interest ( 9% of 1.4 ) = 1.4 + 0.126 = $1.526 million

In pound ( at the expected spot rate )

= 1.526 / 1.43 = £1.067 million

expected profit = £1.067 - £0.9628 = £ 0.1042 million

Therefore the interest rate tp maintain the 4 percent spread

= 0.1042 / 0.9628 = 10.82%

B) Determine the net interest margin if the bank hedges its forward foreign exchange exposure

Forward rate = 1.46

assuming interest as value calculated above = ( 10.82% )

lending amount = £0.9628 million

Repayment = 0.9628 * 111% * 1.46 = $1.5603 million

therefore return rate = $1.5603 - $1.4 = $0.1603 million = 10.27%

hence : Net interest margin = 10.27% - 5% = 5.27%

C) Determine the loan rate to maintain the 4 percent spread if the bank intends to hedge its exposure using the forward rates.

Forward Hedging contract forward rate = 1.46

lending amount = $1.4 / 1.454 = £ 0.9628 million

Total Interest and Principal Repayment Required in $ to maintain 4% Spread = $1.526 million

In pound = 1.526 / 1.46 = £ 1.0452

Interest = £1.0452 - £0.9628 = £0.0824 million

therefore interest Rate to maintain 4℅ Spread

= ( 0.0824 / 0.9628 ) * 100 = 8.56%

3 0

3 years ago

Max has two options this weekend. He could work at his job and earn $7 per hour for three hours, or he could go to an exhibit at

densk [106]

Answer:

The opportunity cost of the event $21.

Explanation:

Opportunity cost is the loss of alternative when someone chooses an alternative.

Number of Hours = 3 hours

Earning per hour = $7

Total opportunity cost = $7 x 3

Total opportunity cost = $21

As Max has to bear the loss of $21 earning when he goes to the event in the museum. So this is his opportunity cost.

8 0

3 years ago