A flexible exchange rate is a rate that is determined by details of demand and supply in the foreign exchange market. Here the value is permitted to fluctuate freely according to the transformation in demand and supply of foreign exchange.
<h3>How an exchange rate fluctuates through the exchange of demand and supply?</h3>
As the price of a foreign currency gains, the quantity supplied by that currency increases. Exchange rates are defined just like other prices: by the exchange of supply and demand. At the equilibrium exchange rate, the supply and demand for a cash are equal.
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Answer: C) suboptimization
Explanation:
The Accounts Payable department's system has been optimized yet the Accounts receivable's system has not been optimized. This means that the company as a whole is suboptimized because only one department was optimized and the other was not.
It can lead to problems such as a credit crunch because the company is paying cash faster than it is receiving it. If both departments were optimized, this wouldn't be the case as the payments and receipts would tally.
Answer: b. increases profits faster than does a low contribution-margin percentage
Explanation:
Contribution Margin refers to the amount of sales left after the Variable Costs of a good has been removed from it. That means Contribution Margin is simply Sales less Variable Costs. It helps to check how much is left to deal with Fixed Costs and how much profit remains after.
The Break-Even Point in sales refers to the point where Total Costs is equal to Total Revenue. At this point both variable costs and fixed costs have been covered by the Revenue.
If you get to this Break-Even Point then, that means you don't have to worry about Fixed Costs anymore and your only worry is the Variable Costs which are present per good. At this point therefore, a Higher Contribution Margin percentage tells that Variable Costs are quite less than sales, this would enable a company to gain profit faster because Fixed Costs are out of the way and anything made over Variable Costs now is Profit.
Answer:
The market price of a $1,000 face value bond is $944.
Explanation:
Market Value of Bond is calculated by following formula.
Coupon Payment = $1000 x 8% = $80
r = YTM = 8.66% = 0.0866
Face value = $1,000
n = number of periods = 16 yeasr
P = C [ (1 - ( 1 + r )^-n ) / r ] + [ F x ( 1 + r )^-n]
P = $80 [ (1 - ( 1 + 0.0866 )^-16 ) / 0.0866 ] + [ $1,000 x ( 1 + 0.0866 )^-16]
P = $80 [ (1 - ( 1 + 0.0866 )^-16 ) / 0.0866 ] + [ $1,000 x ( 1 + 0.0866 )^-16]
P = $679.19 + $264.78
P = $943.97
<span>with an exchange rate of 11 pesos per dollar, the hotel stay will cost $636.36</span>
