Answer:
(a) A U.S. resident buys shares of a Portuguese company paying via wire transfer from her Wells Fargo account to a Portuguese bank.
The US financial account is debited since the stocks were paid by a transfer from Wells Fargo bank.
The credit happens when the Portuguese bank lends the to a Portuguese company that imports goods from America.
(b) An Australian tourist rents a car in the U.S. and pays with her Australian credit card.
The payment received from the Australian tourist represents a credit in the US financial account.
The debit occurs when an American bank receiving the money from the Australian bank will then lend the money to an American company that imports goods.
(c) A U.S.-owned factory in Britain uses local earnings (i.e., in Britain) to buy additional equipment from a Britain firm.
This transaction doesn't affect the US financial account since the money was originated and spent in Britain.
Answer: Promissory estoppel
Explanation:
Because Fran promised that he will pay $700 to Tim for that new scooter and he did not do it, Tim can get back his money with the doctrine of Promissory estoppel contract law.
This kind of contract law can help him because they did not make a legal contract and this can stop someone from going back on a promise that is given to other person and with that contract, a person who did not fulfilled the promise must recover all the damages.
Specialisation is when individuals focus on perfecting a limited range of tasks so as to become experts in that particular field
Answer:
$482,000
Explanation:
The computation of the total lease cost is shown below:
For 16,900 units, the lease cost would be
= Lease cost × sales volume ÷ recent sales volume
= $482,000 × 16,900 units ÷ 20,000 units
= $407,290
This would be the answer but the least cost if fixed whether sales volume is increased or not . So, the total lease cost would remain unchanged i.e $482,000
Answer:
After tax cost of debt is 6.82%
Explanation:
Currently the yield to maturity is the pre-tax cost of debt for Hype company, however the after tax cost of debt considers that the bonds are tax deductible , its actual is less than the pre-tax cost of debt , hence the after-tax cost of debt is shown below
After tax cost of debt=yield to maturity *(1-tax)
after tax cost of debt=11%*(1-0.38)
after tax cost of debt=11%*0.62
after tax cost of debt =6.82%
This confirms that cost of debt is usually lower than cost of equity , where shareholders would want an extra premium to compensate them for the increased risk taken by investing in the business.
