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TiliK225 [7]
3 years ago
12

You are evaluating a proposed expansion of an existing subsidiary located in Switzerland. The cost of the expansion would be SF

21 million. The cash flows from the project would be SF 5.9 million per year for the next five years. The dollar required return is 14 percent per year, and the current exchange rate is SF 1.11. The going rate on Eurodollars is 4 percent per year. It is 2 percent per year on Euroswiss.
Use the approximate form of interest rate parity in calculating the expected spot rates.

A) Convert the projected franc flows into dollar flows and calculate the NPV.

B) What is the required return on franc flows?

C) What is the NPV of the project in Swiss francs?

D) What is the NPV in dollars if you convert the franc NPV to dollars?

Business
1 answer:
Marysya12 [62]3 years ago
7 0

Answer:

Explanation:

First we need to calculate the expected spot rates for the next 5 years using IRP....

Please Kindly go through the attached files for how this and other questions you require answers to are solved step by step.

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59. What is a contingency? a. An existing situation where certainty exists as to a gain or loss that will be resolved when one o
Vera_Pavlovna [14]

Answer:

Correct option is D.

Explanation: A contingency is an existing situation where uncertainty exists as to possible gain or loss that will be resolved when one or more future events occur or fail to occur.

In business, a contingency plan is a plan or course of action a company would implement if an unexpected event occurs. Basically, what this means is that a company is preparing for any outcome.

6 0
2 years ago
Can someone please help me
Kisachek [45]
General skills i think
8 0
3 years ago
PA11.
NARA [144]

Answer:

Using Traditional allocation method

Allocation rate per unit

=<u> Budgeted overhead</u>

  Budgeted direct labour hours

Brass

Overhead allocation rate

= <u>$47,500</u>

  700 hours

=  $67.86 per direct labour hour

Gold

= <u>$47,500</u>

   1,200 hours

=  $39.58 per direct labour hour

Using activity-based costing

Brass

Allocation rate for material cost pool                                                                                                                                                  

= <u>$12,500</u>

   400

=  $31.25 per material moved

Gold

Allocation rate for material cost pool

= <u>$12,500</u>

   100    

= $125 per material moved

Brass

Allocation rate for machine set-up pool

= <u>$35,000</u>

  400

= $87.50

Gold

Allocation rate for machine set-up pool  

= <u>$35,000</u>

   600

= $58.33                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Explanation:

Using traditional allocation method, the overheads for material cost pool and machine set-up pool will be added. The overhead allocation rate per unit is the division of total overhead by the direct labour hours for each product.        

Using activity-based costing, the material cost pool overhead  will be divided by the material moved for each product in order to obtain allocation rate for each product.                                                                                                                                                                

The allocation rate for machine set-up pool is obtained by dividing the machine set-up overhead by the number of machine set-up for each              product.                                                                                      

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3 years ago
A pest control company sprays insecticide around the perimeter of a 180 ft by 180 ft building. if the spray costs $0.11 per foot
Bess [88]
To the nearest dollar, it would cost $3,564
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Which is the best measurement to use to determine who might have the absolute advantage?
Makovka662 [10]

Answer:

<u>low opportunity cost</u>

Explanation:

<u>Opportunity cost</u> is described as a process in which an individual sacrifices something when they tend to choose one thing or option over another option or thing.

<u>Low opportunity cost: </u>The term "low opportunity cost" is determined as the possibility of an individual's chosen investment returns to be lower than the forgone investment's returns.

4 0
3 years ago
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