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hram777 [196]
3 years ago
7

the United States, a three-pound can of coffee costs about $5. If the exchange rate is 0.8 euros per dollar and a three-pound ca

n of coffee in Belgium costs 7 euros. What is the real exchange rate
Business
1 answer:
Luda [366]3 years ago
3 0

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 × \frac{Price\ in\ domestic\ market}{Price\ in\ foreign\ market}

= 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

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Morales Company sells $320,000 of its receivables to Instant Factors, Inc. Instant Factors assesses a finance charge of 3% of th
bazaltina [42]

Answer:

Dr Cash $310,400

Dr Factoring expense$9,600

Cr Account receivable $320,000

Explanation:

Preparation of the journal entry to record the sale of the receivables on Morales Company's books.

Dr Cash $310,400

($320,000-$9,600)

Dr Factoring expense$9,600

($320,000*3%)

Cr Account receivable $320,000

(Being to record the sale of the receivables on Morales Company's books

7 0
3 years ago
On January 1 of year 1, Arthur and Aretha Franklin purchased a home for $1.5 million by paying $200,000 down and borrowing the r
ASHA 777 [7]

Answer:

a. What is the amount of the interest expense the Franklins may deduct in year 1?

this will depend on the total interest paid during the year, since we are not told how long their mortgage is, we cannot know exactly how much interest expense they will pay. Generally mortgages require monthly payments, so I prepared a simulated amortization schedule for the first year assuming that the mortgage lasts 30 years and a monthly payment of $8,648.93.

year  beg.     scheduled  principal interest ending

        balance      payment                                      balance

1 1300000    8649         1066 7583 1298934

2 1298934    8649         1072 7577 1297863

3 1297863    8649         1078 7571 1296785

4 1296785    8649         1084 7565 1295700

5 1295700    8649         1091         7558 1294609

6 1294609    8649         1097 7552 1293512

7 1293512    8649         1103         7545 1292409

8 1292409    8649         1110         7539 1291299

9 1291299    8649         1116      7533 1290183

10 1290183    8649         1123  7526 1289060

11 1289060    8649         1129  7520 1287931

12 1287931    8649         1136  7513 1286795

total interest                                     $90,582

  • The total interest that can be deducted in this case would be $90,582 during year 1.

b. Assume that in year 2, the Franklins pay off the entire loan but at the beginning of year 3, they borrow $300,000 secured by the home at a 7 percent rate. They make interest-only payments on the loan during the year. What amount of  interest expense may the Franklins deduct in year 3 on this loan (the Franklins do not use the loan proceeds to improve the home)?

  • $0, interests from home equity loans used for personal expenses are not deductible.

c. Assume the same facts as in (b), except that the Franklins borrow $80,000 secured by their home. What amount of interest expense may the Franklins deduct in year 3 on this loan (the Franklins do not use the loan proceeds to improve the home)?

  • $0, interests from home equity loans used for personal expenses are not deductible.

Explanation:

8 0
3 years ago
The Foxworthy Corporation uses a periodic inventory system and the LIFO inventory cost method for its one product. Beginning inv
Bumek [7]

Answer:

$19,192

Explanation:

Foxworthy Corporation before-tax profit/loss using LIFO method will be;

24000 units * $6.00 per unit = $144,000

16808 units * $7.00 per unit = $117,656

In 2018 the inventory quantity declined by 18000 units.

The cost of 18,000 units will be 18,000 * $8.00 per unit = $144,000

16,808 units * $7.00 per unit = $117,656

18,000 units - 16,808 units = 1,192 units

1,192 units * $6.00 per unit = $7,152

Profit/ Loss due to inventory decline :

$144,000 - $117,656 - $7,152 = $19,192.

6 0
3 years ago
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Firdavs [7]
Private consumption.
3 0
3 years ago
Which of the given situations are you likely to experience because of stress
OleMash [197]
D.

stress can and will cause a crash of the work ethic.
6 0
3 years ago
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