Answer: (1) 10 euros (2) 15dollars
Explanation:
S= P1 /P2
where:
S= Exchange rate of currency 1 to currency 2
P1 = Cost of good X in currency 1
P2 = Cost of good X in currency 2
(1) s = 1.5, P1 = 15 dollars, P2 = ???
so,
1.5 = 15 / P2
P2 = 15/1.5 = 10 euros
Hence, according to the theory of purchasing power parity,
The price of a haircut that cost 15 dollars in Dallas will be 10 euros in Paris.
(2) S = P1/P2
taking 1 euro to 1.5dollars exchange,
1.5 = P1/P2 but P2 = 10 euros
hence P1 = 1.5 x 10 = 15 dollars.
Hence, according to the theory of purchasing power parity,
A wheel of French cheese that costs 20 euros in Paris should cost 15dollars in Dallas
Answer:
Option (B) is correct.
Explanation:
1 pound = $1.60
1 pound = $1.50
So, there is a depreciation in the value of pound relative to the dollar and appreciation in the value of dollar relative to the pound.
Now, suppose a resident of united states purchase some quantity of goods(say, 20 shirts) from the seller in United kingdom.
Price of each shirt = 2 pounds
Hence,
Before the change in exchange rate, then the buyer have to pay in dollars:
= 20 × (2 × $1.60)
= 20 × 3.2
= $64
After the change in exchange rate, then the buyer have to pay in dollars:
= 20 × (2 × $1.50)
= 20 × 3
= $60
Hence, the amount paid by the resident of united states reduced because of the fall in exchange rate. Now, they have to pay less for the same amount of commodities. This shows that there is an appreciation in the currency of US relative to UK.
Answer:
c. criterion deficiency
Explanation:
Based on the information provided within the question it can be said that in this scenario it seems that the performance management system suffers from Criterion deficiency. This term refers to a company failing to assess one or more very important aspects of the process of job performance appraisal for employees within the company. Such as is the case in this scenario as the company is only looking at the sales revenue and completely ignoring all of the other important factors.
An unexpected result is examined a lot more closely, since it must disagree with some currently accepted theory to be accepted as unexpected. If something is expected, we generally don't question it, although this is sometimes a tragic mistake and may cost a lot more for a person.
Answer:
The corporation's tax liability is $ 228,820.
Explanation:
To calculate tax liability we first have to find net profit. Detail calculation is given below.
<u><em>Net profit Calculation</em></u>
Sales $ 3,130,000
cost of goods sold and the operating expenses ($ 2,080,000)
Interest expense ( $ 377,000)
Net profit $ 673,000
<u><em>Tax liability Calculation</em></u>
Income fall under Tax bracket of 34% ($75,001 to $10,000,0000 for corporate tax. No additional surtax will be charged as income do not fall under its net.
Tax liabilty = 673,000 * 34% = $ 228,820
