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OleMash [197]
3 years ago
14

If the price of a sofa is $800 in the u.s. and 2400 pesos in argentina, and the exchange rate is 4 pesos per dollar, what is the

real exchange rate?
Business
1 answer:
Vesnalui [34]3 years ago
4 0
The real exchange rate ( RER ) is the ratio of the price level abroad and the domestic price level.
RER = ( Nominal Exchange Rate x Foreign Price ) / ( Domestic Price )
The price of sofa is 2,400 pesos in Argentina and the nominal exchange rate is 4 pesos per dollar (  2,400 : 4 = $600 )
RER = 4 x $600 / $800 = 3
Answer: The Real Exchange Rate is 3 pesos per dollar.
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CCC Corp has a beta of 1.5 and is currently in equilibrium. The required rate of return on the stock is 12.00% versus a required
Oxana [17]

Answer:

CCC's new required return be 16.5%

Explanation:

For computing the new required return, first, we have to compute the risk-free rate of return which is shown below:

Expected return = Risk- free rate of return + Beta × (Market risk -  Risk- free rate of return)

12% = Risk- free rate of return  + 1.5 × (10%  -  Risk- free rate of return))

12% = Risk- free rate of  return  + 15% - 1.5% Risk- free rate of return

So, the Risk- free rate of  return is 6%

Now the average stock is increased by 30%

So, the new market risk is 13% and other things will remain constant

So, the new required return equal to

= 6% + 1.5 × (13% - 6%)

= 6% + 1.5 × 7

= 16.5%

8 0
3 years ago
Pharma Company produces various medicines in capsule form. At the beginning of the month of March, it had 5,000 units that were
levacccp [35]

Answer:

Pharma Company

1. Weighted Average method:

Weighted Average Method:

Equivalent units of production:

Started and completed this period 55,000

Ending WIP                                        10,000

Total equivalent unit produced =   65,000

Total cost of production:

Beginning WIP =  $150,000

Current period     600,000

Total cost =        $750,000

Cost per equivalent unit = $11.54 ($750,000/65,000)

Cost assigned to:

Units completed = 55,000 * $11.5385 = $634,617

Ending WIP =         10,000 * $11.5385 =     115,385

Total cost of production =                     $750,002

Cost Reconciliation:

Beginning WIP = $150,000

Completed units  600,000

Total costs =      $750,000

Ending WIP =         115,385

Cost assigned to

  production        634,617

2. FIFO method:

Explanation:

a) Data and Calculations:

                                   Units    Completion %         Cost

Beginning WIP =       5,000       2,000 (40%)     $150,000

Current completion (WIP)         3,000 (60%)

Completed            55,000     55,000 (100%)     600,000

Ending WIP           20,000      10,000 (50%)

Weighted Average Method:

Equivalent units of production:

Beginning WIP                                     3,000

Started and completed this period 55,000

Ending WIP                                        10,000

Total equivalent unit produced =   68,000

Total cost of production:

Current period     600,000

Cost per equivalent unit = $8.82 ($600,000/68,000)

Cost assigned to:

Beginning WIP =  

Units completed

Beginning WIP =          $150,000

=    3,000 * $8.82 =       $26,460

= 55,000 * $8.82 =       485,100

Ending WIP:

= 10,000 * $8.82 =         88,200

Total cost of production = $749,760

Cost Reconciliation:

Beginning WIP (40%) = $150,000

WIP completed (60%)      26,460

Completed units            485,100

Ending WIP =                   88,200

Total cost =                 $749,760

7 0
2 years ago
EA12.
BaLLatris [955]

Answer:

$38,400

Explanation:

<em>1. Cash Purchases:</em>

The total purchases in the month of March is of $35,000.

It is given that 70% of Purchases are for cash.

Hence, 70% of $35,000 would be;

$39,000 x 0.70

$27,300

<em>2. Credit Purchases: </em>

Remaining Balance of Purchases from the month of February:

For the month of February Cash Purchases can be calculated as follows;

$37,000 x 0.70

$25,900

Remaining Balance to be paid in March for the month of February can be calculated as follows;

$37,000 - $25,900

$11,100

<em>3. CASH PAYMENT for PURCHASES in MARCH:</em>

Cash Purchases = $27,300

Credit Purchases = $11,100

Hence;

<em>Cash Payment for purchases in March = Cash Purchases + Credit Purchases </em>

Cash Payment for purchases in March = $27,300 + $11,100

Cash Payment for purchases in March = $38,400

7 0
3 years ago
You are given two choices of​ investments, Investment A and Investment B. Both investments have the same future cash flows. Inve
valina [46]

Answer:

C. The present value of cash flows in Investment A is higher than the present value of cash flows in Investment B.

Explanation:

Typically, discount rate represents cost of capital or funds used to finance the investment. This implies that the higher the cost of capital , the lower the present value of cash inflow on the investment and vice-versa.

Hence, the present value of cash flows in Investment A is higher than the present value of cash flows in Investment B,  because A has a lower discount rate.

3 0
3 years ago
The product structure overcomes one of the challenges common to a functional organization structure because it is
Alona [7]

Answer:

focus on the goods being made

7 0
1 year ago
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