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Kruka [31]
3 years ago
5

Happy Company wants to raise $2 million with debt financing. The funds are needed to finance working capital, and the firm will

repay them with interest in one year. Happy Company’s treasurer is considering three options:
a. Borrowing U.S. dollars from Security Pacific Bank at 8 percent.
b. Borrowing British pounds from Midland Bank at 14 percent.
c. Borrowing Japanese yen from Sanwa Bank at 5 percent.
If Happy borrows foreign currency, it will not cover it; that is, it will simply change foreign currency for dollars at today’s spot rate and buy the same foreign currency a year later at the spot rate that is in effect. Happy Company estimates the pound will depreciate by 5 percent relative to the dollar and the yen will appreciate 3 percent relative to the dollar in the next year. From which bank should Happy Company borrow?
Business
1 answer:
shepuryov [24]3 years ago
7 0

Explanation:

Happy Company will consider both capital expenses and foreign exchange threats.

If Happy's calculations are right, borrowing from Minland Bank is the best choice.

However, since forecasts are based solely on estimation, the choice is still centered on Happy Company's risk appetite, whether to take an 8 per cent flat rate, a strong 14 per cent rate, but with a chance of decline or a small 5 per cent rate, but with a possibility of appreciation.

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Janice always makes the first offer during salary negotiations because that number will become the starting point for any furthe
Ira Lisetskai [31]

Answer:

b. anchoring and adjustment heuristic.

Explanation:

Anchoring and adjustment heuristic is a Psychological heuristic in which a person or individual influences others by suggesting a starting point. The other person will then rely on the first information offered and an anchor is then placed. The further judgment is made around that anchor which created a bias toward interpretation of information.  

Janice also used a strategy of anchoring and adjustment bias by giving first offer of salary. This will be considered as anchor which is placed and all the other negotiations will be around that salary anchor which will be used as starting point.

8 0
3 years ago
During its first year of operations, puffin, incorporated reported sales revenue of $388,200 but only collected $308,000 in cash
sp2606 [1]

During its first year of operations, puffin incorporated reported sales revenue of $388,200 but only collected $308,000 in cash from customers. at the end of the year, accounts receivable equals:$80200.

Annual revenue is the amount of money your business earns from sales in a year. This does not include costs and expenses. To calculate annual sales, multiply the quantity of each product sold by the selling price, then add the annual sales for each product to arrive at the total annual sales.

A legal entity is an entity that exists legally separate from its owners, managers, operators, employees, and agents. Legal entities have the same powers as individuals, including the right to own and dispose of property, the power to sue and be sued, and the power to contract for a profit. A business example is an agriculture. An example transaction is a home sale.

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8 0
1 year ago
A company must decide between scrapping or reworking units that do not pass inspection. The company has 13,000 defective units t
gregori [183]

Answer:

A.Incremental income(loss)

Sales as scrap $39,000

Rework $41,600

B.The company should REWORK

Explanation:

A. Sales as Scrap Rework

Sales of scrap units ($13,000×3.00)

$39,000

Sales of rework units ($13,000×8.20)

$106,600

Cost to rework units($13,000×5.00) $65,000

Incremental income(loss)

$39,000 $41,600

B.Therefore the company should REWORK

($106,600-$65,000)

=$41,600

8 0
3 years ago
What is the practice of banks and mortgage lenders identifying high-risk areas (usually low-income or minority neighborhoods) an
Bogdan [553]

Answer:

redlining

Explanation:

Redlining is an illegal banking practice that focuses on neighborhoods that are mostly inhabited by minorities. The term redlining itself comes from the practice of marking neighborhoods on city maps with red lines to represent them as dangerous both for banking purposes and high crime rates.

Banks cannot directly deny a credit based on where you live, but they can charge very high interest rates that make them very difficult to pay, or simply ask for a lot of paperwork and more requirements than usual.

4 0
3 years ago
A(n) ________ includes how employees should react to security problems, whom they should contact, the reports they should make,
Alona [7]
An "Incident Response Plan". :)
6 0
3 years ago
Read 2 more answers
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