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3 years ago

Explain the relationship between potential return and risk when considering an investment.

1 answer:

5 0

Potential return has to do with the ability to receive a certain amount from an investment, while risk refers to the potential loss of the investment.

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In year T, a US citizen buys 100 shares of Sonic on the Tokyo stock exchange at 700 yens each. Suppose the exchange rate then is

zlopas [31]

Answer:

Change in US external wealth between periods T and T +1 in dollars = -$100

Explanation:

Since nothing else changes, this implies that the exchange rate per yen is $0.01 in periods T and T +1. Therefore, we have:

Value shares of Sonic in period T in dollar = Number of shares of Sonic bought in period T * Price per share of Sonic in Yen in period T * Exchange rate per yen in periods T = 100 * 700 * $0.01 = $700

Value shares of Sonic in period T+1 in dollar = Number of shares of Sonic in period T+1 * Price per share of Sonic in Yen in period T+1 * Exchange rate per yen in period T+1 = 100 * 600 * $0.01 = $600

Change in US external wealth between periods T and T +1 in dollars = Value shares of Sonic in period T+1 in dollar - Value shares of Sonic in period T in dollar = $600 - $700 = -$100

4 0

3 years ago

DEF Ltd is a global leader in the manufacture, integration and support of networking and telecommunications systems. The company

Serjik [45]

Some of the challenges of this company include lack of control over financial reporting in all branches, and inaccurate data to make decisions for next years.

DEF Ltd's main problem is the inaccuracy regarding the recognition of revenue and other inconsistencies in financial reporting. This problem includes:

Inaccuracies related to revenue and deferred revenue.
Lack of documentation of some transactions.

Moreover, these problems are intended to be solved through a review process and training seminars. These two ideas are useful for the problem; however, the company might face some challenges and problems such as:

Lack of control in all branches: DEF Ltd seems to be a big company with multiple branches around the world. This makes it difficult for the company to control all financial records even if employees are educated about the process through seminars.
Inaccurate data for next periods: Considering there are lots of inconsistencies and some of the reports are incomplete, it is likely even after the review process the company does not have complete information about the previous transactions or revenues. This can affect future projections and decisions.

Note: This question is incomplete; here is the missing part:

Using the disclosures above as a starting point, brainstorm about the challenges regarding internal controls and that a company may face in doing business internationally?

Learn more in: brainly.com/question/10916805

5 0

2 years ago

The MAIN reason suppliers offer cash discounts is to try to encourage.

goldfiish [28.3K]

The answer is A. Early payment

In Cash discounts, buyers will have the incentive to reduce the amount owed to the seller if they pay their liability faster than the Deadline

For example, the sellers can offer a 2 % discounts if the buyers make a payment within 10 days, while the actual deadline is 30 days

4 0

3 years ago

Read 2 more answers

A loan of $100,000 is taken out which requires an annual interest payment of 6% of the borrowed amount of money (in market dolla

pav-90 [236]

Answer:

C. $5,150

Explanation:

Calculation for what will be the value of interest payment at the end of fifth year in real dollars

First step is to calculate the Interest amount per year

Interest amount per year = 100,000*6%

Interest amount per year = $6,000

Now let calculate the value of interest payment at the end of fifth year in real dollars

Value of interest payment in 5th year in real dollars = 6,000/(1+3.1%)^5

Value of interest payment in 5th year in real dollars= 6,000/1.164913

Value of interest payment in 5th year in real dollars= $5,150

Therefore the Value of interest payment in 5th year in real dollars will be $5,150

4 0

3 years ago

Terms of a lease agreement and related facts were:

Feliz [49]

Answer:

1) January 1, 2018, asset leased

Dr Lease receivable 550,000

Cr Equipment 550,000

January 1, incremental costs associated with lease transaction

Dr Lease receivable 6,652

Cr Cash 6,652

January 1, 2018, first lease payment collected

Dr Cash 200,000

Cr Lease receivable 200,000

2) to calculate the effective rate we can use the present value of an annuity due formula

PV annuity due factor, 3 periods, ?% = present value of lease receivable / annual payment = $556,652 / $200,000 = 2.78326

Now we must use an annuity due table to determine a possible rate. In this case, the exact rate is 8%.

3) December 31, 2018, interest receivable on lease contract

Dr Interest receivable 28,532

Cr Interest revenue 28,532

interest receivable = ($556,652 / $200,000) x 8% = $28,532

5 0

3 years ago