Answer:

€1.54/$1.00

Explanation:

When the bond sells at par, the implicit €/$ exchange rate pays €651.25 at maturity per €1000

651.25/1000= 1/x

Cross multiply

651.25x = 1000

x= 1000/651.25

x= 1.54

Hence the implicit exchange rate is €1.54/$1.00

Quality assurance is the other way

**Answer:**

Option D. **$6.25 Million**

**Explanation:**

The Free Cash Flow can be calculated using the following formula (Ignoring investment):

**Free Cash Flow = (Revenue - Operating Expenses) Minus Tax**

Here

Revenue is $20 Million

Operating Expenses are $12 Million

And

Tax is not given however tax rate is given which is 35% here. For tax purposes, we will assume that the depreciation is tax allowable expense, so

**Tax = (**Revenue - Operating Expenses - Depreciation**)** * Tax rate

By putting values we have:

Tax = ($20m - $12m - $3m) = $1.75 Million

The cash impact is taken while calculating the Free cash flow. This free cash flow method is also used in IRR, NPV, discounted payback method, etc.

By putting values in the above bold equation, we have:

Free Cash Flow = ($20m - $12m) - $1.75 = **$6.25 Million**

Answer: P =$50

Q= 25

Explanation: P= 100-2Q

P= 2Q

To get the quantity supplied Q, we have to educate both equations

100-2Q=2Q, 100=2Q+2Q

100=4Q, Q=100/4 , Q=25

To get the equilibrium price we have to substitute the value of Q which is 25 into any of the equation.

Using equation 1

P=100-2Q, P=100-2(25)

P=100-50, P=$50.

If the price is controlled at $60, then the production pays the producer this is because a commodity is not expected to be sold at the equilibrium price, price flooring is a way that government or a group control the market price of a commodity or produce by imposing a particular price on it. This is to ensure that the producers are not at loss with their production, a price floor is always higher than the equilibrium price to be effective as seen in the example given above, price floor is $60 while equilibrium price is $50.

An example of a price floor for services can be seen in the minimum wage stated by the government this is to ensure that people's services are not misused anyhow.

Price flooring most times can lead to surplus quantity produced if consumers are not willing to pay the price, because the producer will be wiling to produce more in order to make more profit.