Answer:
(a) 7.5%
(b) 8.5%
(c) 9.5%
Explanation:
(a) Foreign country inflation rate - US inflation rate = Foreign country risk free rate - US risk free rate
Lets foreign country inflation rate = X
X - 1.5 = 8 - 2
X - 1.5 = 6
X = 6 + 1.5
= 7.5%
(b)
Lets foreign country infllation rate = X
X - 1.5 = 9 - 2
X - 1.5 = 7
X = 7 + 1.5
= 8.5%
(c)
Lets foreign country inflation rate = X
X - 1.5 = 10 - 2
X - 1.5 = 8
X = 7 + 1.5
= 9.5%
Answer:
Increased prices typically result in lower demand, and demand increases generally lead to increased supply. However, the supply of different products responds to demand differently, with some products' demand being less sensitive to prices than others.
Answer:
17%
Explanation:
This can be calculated using the Capital Asset Pricing Model which is given as under:
Required Return = Rf + Beta factor * (Market Risk Premium)
By putting the values, we have:
Required Return = 5% + 1.2 * 10% = 17%
Disney need to earn 17% return on investment to trigger a Lego investment.
The direct write-off method involves writing off a bad debt expense directly against the corresponding receivable account.
What is direct write-off method?
Bad debts can be accounted for in one of two ways: directly or indirectly. Bad debts are only recorded once it is determined that they cannot be recovered. In other words, when it is established beyond a reasonable doubt that the debt cannot be collected, a business will merely declare the bad debt charge and reduce its accounts receivable.
Due to the fact that the direct write-off method frequently records bad debt in a period other than the period in which the transaction was recorded. As a result, it frequently fails to align costs with income.
Many small businesses employ the direct write-off approach, which doesn't call for audited financial records, to record uncollectible accounts.
To know more about direct write-off method refer:
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Answer:
b. $10,000
Explanation:
Estimated selling price - Estimated cost of disposal = Net realisable value ceiling.
NRV Ceiling = $208,000 - $10,000 = $198,000
Net realisable value Floor = Ceiling - normal profit margin
NRV Floor = $198,000 - $6,000 = $192,000
Market value Current replacement cost = $190,000
Market Loss = NRV ceiling - RC
Market loss = $200,000 - $190,000 = $10,000
