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DIA [1.3K]
3 years ago
6

Jensen Co. expects to pay €50,000 in one month for its imports from France. It also expects to receive €200,000 for its exports

to Belgium in one month. Jensen estimates the standard deviation of monthly percentage changes of the euro to be 2.5 percent over the last 50 months. Assume that these percentage changes are normally distributed. Using the value-at-risk (VaR) method based on a 97.5 percent confidence level, what is the maximum one month loss in dollars if the expected percentage change of the euro during next month is 2 percent? Assume that the current spot rate of the euro (before considering the maximum one-month loss) is $1.35.
Business
1 answer:
Julli [10]3 years ago
5 0

Answer:

-$5,873

Explanation:

For computation of maximum one month loss in dollars first we need to find out the net exposure and maximum one month loss in percentage which is shown below:-

Net exposure = Received amount - Paid amount

= €200,000 - €50,000

= €150,000

Maximum one - month loss in Percentage = Next month percentage - (Alpha × Euro percentage)

= 2% - (1.96 × 2.5%)

= -2.9%

Maximum one - month loss in Dollars = Net exposure × Current spot rate of the euro × Maximum one - month loss in Percentage

= €150,000 × $1.35 × (-0.029)

= -$5,873

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The rate established at the beginning of a period that uses estimated overhead and an allocation factor such as estimated direct
Bumek [7]

Answer:

Predetermined overhead rate

Explanation:

The predetermined overhead rate is the rate that is computed by taking the estimated manufacturing overhead and the same would be divided by allocation factor that could be estimated direct labor, estimated direct hours, etc in order to assign the overhead cost

So according to the given situation, the first option is correct i.e. predetermined overhead rate

5 0
3 years ago
Lin Corporation has a single product whose selling price is $134 per unit and whose variable expense is $67 per unit. The compan
podryga [215]

Answer:

1. 600 units

2. $81,800

Explanation:

In this question we use the formula of break-even point in unit sales which is shown below:

= (Fixed expenses + target profit) ÷ (Contribution margin per unit)

where,  

Contribution margin per unit = Selling price per unit - Variable expense per unit

= $134 - $67

= $67

And, the other items values would remain the same

Now put these values to the above formula  

So, the value would equal to

= ($32,300 + $7,900) ÷ ($67)

= ($402,00) ÷ ($67)

= 600 units  

2. Break even point = (Fixed expenses + desired profit) ÷ (Profit volume Ratio)  

And, Profit volume ratio = (Contribution margin per unit) ÷ (selling price per unit) × 100

So, the Profit volume ratio = ($67) ÷ ($134) × 100 = 50%

The other values would remain same

Now put these values to the above formula  

So, the value would equal to  

= ($32,300 + $8,600) ÷ (50%)  

= $81,800

8 0
3 years ago
A certain store sells all maps at one price and all books at another price. On Monday the store sold 12 maps and 10 books for a
solong [7]

Answer:

(B) $0.50

Explanation:

The total cost is a function of the number of maps sold and the number of books sold. To determine the cost of each, a set of equations have to be solved simultaneously.

Let the cost of a map be m and that of a book be b

12m + 10b = 38

20m + 15b = 60

6m + 5b = 19

4m/3 + b = 4, b = 4 - 4m/3

6m + 20 - 20m/3 = 19

2m/3 = 1

m = 3/2 = 1.50

b = 4 - 4m/3

b = 4 - 2 = 2

The cost of a book is $2 while that of a map is $1.50

Hence a map sell for $0.50 less than a book.

7 0
3 years ago
Dave Bowers collects U.S. gold coins. He has a collection of 41 coins. Some are​ $10 coins, and the rest are​ $20 coins. If the
taurus [48]

Answer:

1. Dave has 23 ($10 coins) and 18 ($20) coins.

2. Dave has 18 ($10 coins) and 16 ($20) coins.

Explanation:

1.

Let x be the number of $10 coins.

Then, the number of $20 coins will be 41-x.

The equation for the sum of money can be written as:

590 = 10x + 20 * (41-x)

590 = 10x + 820 - 20x

590 - 820 = -10x

-230 / -10 = x

x = 23

This means that Dave has 23 $10 coins and (41-23 = 18) 18 $20 coins that sum up to a face value of $590.

2.

Using the same priciple,

let x be the number of $10 coins

let 34-x be the number of $20 coins

Sum of money equation:

500 = 10x + 20 * (34-x)

500 = 10x + 680 - 20x

500 - 680 = -10x

-180 / -10 = x

x = 18

So, Dave has 18 $10 coins and (34-18 = 16)  16 $20 coins that add up to a face value of $500.

3 0
3 years ago
Read 2 more answers
Company uses the​ percent-of-sales method to estimate uncollectibles. Net credit sales for the current year amount to ​, and man
yanalaym [24]

Complete Question:

Company uses the​ percent-of-sales method to estimate uncollectibles. Net credit sales for the current year amount to ​$500,000, and management estimates 2% will be uncollectible. The amount of expense to report on the income statement was $8,000. The Allowance for Uncollectible Accounts prior to adjustment has a credit balance of $2,000. The balance of Allowance for Uncollectible​ Accounts, after​ adjustment, will be

Answer:

The balance of Allowance for Uncollectible​ Accounts, after​ adjustment, will be

$10,000

Explanation:

a) Data and Calculations:

Net credit sales = $500,000

Uncollectible estimate = 2% of net credit sales

Uncollectible Accounts expense = $8,000

Allowance for Uncollectible Accounts = $2,000 before adjustment

Allowance for Uncollectible after adjustment = $500,000 * 2% = $10,000

6 0
3 years ago
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