Answer:
The consumer price index for 2015 on Planet Econ is 1.25
Explanation:
The formula for computing the consumer price index is given below:
= (Total cost in the current year) ÷ (total cost in the base year)
where,
Total cost in the current year equals to
= (Base year book quantity × current year book price) + (base year hamburgers quantity × current year hamburgers price)
= 10 books × $30 + 25 hamburgers × $3
= $300 + $75
= $375
we use the base year quantity for computing the total cost for the current year.
And, the Total cost in the base year equals to
= (Base year book quantity × base year book price) + (base year hamburgers quantity × base year hamburgers price)
= 10 books × $25 + 25 hamburgers × $2
= $250 + $50
= $300
Now put these values to the above formula
So, the answer would be
= $375 ÷ $300
= 1.25
Hence, The consumer price index for 2015 on Planet Econ is 1.25
Answer:The cost of capital that will make both investments equal is 17.045%
Explanation:
Investment A
$1.5 million will be received in perpetuity we can there use perpetuity formula to Value investment A.
Value of Investment A = 1500 000/r
Investment B
$1.2 Million will be received in Investment B with a growth rate of 3% will then use Gordon's growth rate model to value investment B.
Value of investment B = (1200 000 x (1+0.03))/(r - 0.03)
Value of investment B = 1236000/(r - 0.03)
1500 000/r = 1236000/(r - 0.03)
1236000(r) = 1500000(r - 0.03)
(r - 0.03) = 1236000( r)/1500000
r - 0.03 = 0.824r
r - 0.824r = 0.03 = 0.176r = 0.03
r = 0.03/0.176 = 0.170454545
R = 17.045%
The cost of capital that will make both investments to be equal is 17.045%
<span>If
the friend sues Mary, the court most likely will not require Mary to do
anything because this was a gift promise. In order for a gift promise to be
enforceable by the law, it should be a contract. And in order for it to be a
contract, there should be a consideration received by Mary but in this case, no
consideration was received by Mary therefore, the promise is unenforceable.</span>
Answer:
The interest rate is higher in the US.
Explanation:
The forward price is calculated using the following formula,
F= S ( 1+Rd / 1+Rf)^t
where,
- F = Forward rate
- S = Spot rate
- Rd = Nominal interest rate in domestic market
- Rf = Nominal interest rate in foreign market
- t = time in years
We consider that the domestic market is the US and the domestic currency is the USD. Thus, it is a direct quote where 1 EUR = 1.3 USD
The forward price ER is more than the Sport ER only when the interest rate in domestic market is more than the interest rate in foreign market and as a result, the value of domestic currency against a foreign currency in the forward market depreciates.
We can see this by the following example,
Say Spot rate is $1.3 per 1 EUR and the interest rate in US is 10% while that in Euro zone is 5%. When we calculate the forward ER we will see that 1 EUR will buy us more USD in forward (more than 1.3 USD)
F= 1.3 * (1.1 / 1.05)^1 => $1.362 PER 1EUR
Answer:
Boyd will record Warranty Expense in the amount of $400 for the month.
Explanation:
Warraty expense is an obligation on the business because business idmliable to accept the claims of warranty. A estimated percentage of warranty expense is charges as an expense in each period.
Sales = $20,000
Warranty repair = 2% of Sales
Warranty Expnese = Sales x Warranty repairs percentage
Warranty Expnese = $20,000 x 2%
Warranty Expnese = $400
