Answer:
Explanation:
Definition of simple terminologies ;
- A contractual agreement is an agreement which is made on future exchanges in order to buy or sell goods at a fixed price at a specified time period.
- LIBOR stands for London interbank offered rate which is the rate at which banks borrow money from other banks in london market. this rate is a fixed term by the british bankers association.
a) The implied LIBOR of the September Eurodollar futures of 96.4 is = 100 96.4 /400-=0.9%
(b) As we want to borrow money, it implies buying protection against high interest rates, which means low Eurodollar future prices. We will short the Eurodollar contract.
c) Number of contact to be entered into = One Eurodollar contract which is based on a $1 million 3-month deposit. As such, entering into hedge a loan of $50M, will automatically implies entering into 50 short contracts.
d) A true 3-month LIBOR of 1% means an annualized position (annualized by market conventions) of 1% x 4 = 4%. Therefore, our 50 short contracts will pay: [96.4 − (100 − 4) × 100 × $25] × 50 = $50,000.
The increased interest rate has made the loan more expensive as such, the loss to exposure will be compensated hence we have to pay the following amount ; ($50,000,000 x 0.01) - $50,000
= $450,000
Answer:
Solution: the answer in delivered in 2 stages because of the character of dualistic problems:-
Part (1)
As Kent and Craig are concerned during a professional with prospective risk and that they wish to hide their prospective accountability. the character of the industry which can be utmost applicable in corporate against the other variety of industry like individual merchant or partnership company because of the subsequent details:-
Reason I: Unrestricted accountability- just in case of insolvency or industry letdown, Kent and Craig don't seem to be obligated to trade their particular resources.
Reason II: convenience of Business- because of the Supply of additional investment compared to restricted investment in sole profession and partnership company, they're ready to manage with the qualms related to the industry.
Part (2)
Wanting to the purposes of Dave and Cindy, the indebtedness corporation is desirable because of the subsequent details:-
Reason I: No danger to non-public assets because the corporation is proscribed accountability.
Reason II: just one level of tax within the variety of company tax
.
Answer:
C. $34,500
Explanation:
Given the above information, applied fixed overhead is computed as;
= Standard hours allowed for actual production × Predetermined rate
Standard hours allowed for actual production = 11,500
Predetermined rate = $3 per hour
Then,
Applied fixed overhead
= 11,500 hours × $3 per hour
= $34,500
There are numerous reasons, things like war, immigration, increased poverty, or things like unpredictable natural disasters. When a hurricane strikes and destroys entire cities and housing it has to be fixed quickly and that is spending that was not planned since you can't expect things like that. Wars often cost much more than what was planned because bad things happen and they need to be fixed. Immigration can lead to an increase in social welfare spending since not all immigrants find a job quickly and establish themselves in the society.
I'm not sure I believe its mark up or supply and demand
