Answer:
=4/7 cans of Belgium coffee for one can of US coffee
Explanation:
Cost of 1 can of coffee in US = $5
Cost of similar can of coffee in Belgium = EURO 7
Real Exchange Rate (Euro/$) =
Nominal Exchange rate × 
= 0.8 × 5/7
=4/7 cans of Belgium coffee per can of US coffee
Nominal exchange rate refers to the exchange rate between two countries which is not adjusted for inflation.
Nominal exchange rate when adjusted for inflation is known as real exchange rate.
Real rate = Nominal rate - Inflation rate
The price of the water needs to be raised by 40% when the consumption of water reduces by 10% and the price elasticity of demand results to 25%.
<h3>What is meant by the price of elasticity of demand?</h3>
The price elasticity of demand is determined as the proportionate variation in quantity with respect to variation in the price of a good.
Given values:
Change in water consumption (fall): 10%
Price elasticity of demand: 25%
Computation of percentage change in the price of water:
Therefore, there is an increase in water price by 40%.
Learn more about the price elasticity of demand here:
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Answer:
$1.64 per share
Explanation:
The computation of Number of Shares for computing Diluted Earning per share is shown below:-
Proceeds expected = 5,300 × $6
= $31,800
No. of Shares re-purchased = $31,800 ÷ $11
= $2,891 (rounded)
Net Effect of Stock Option = 5,300 - $2,891
= 2,409 shares
Number of Shares for computing Diluted Earning per share = Outstanding shares + Net Effect of Stock Option
= 71,105 + 2,409
= 73,514
Diluted earnings per share for the quarter = Net income for the quarter ÷ Number of Shares for computing Diluted Earning per share
= $120,805 ÷ 73,514
= $1.64 per share
So, for computing the Number of Shares for computing Diluted Earning per share we simply applied the above formula.
