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viva [34]
3 years ago
7

Suppose that the United States and China trade exclusively with each other. What will happen to the value of the U.S. dollar, ce

teris paribus, if the price level in China rises faster than the price level in the United States
Business
1 answer:
grin007 [14]3 years ago
6 0

Answer:

If the price level in China is rising faster than the price level in the US, this means that the Chinese inflation rate is higher.

two different things will happen here:

1) higher inflation means that Chinese products will be more expensive which will increase the demand for American products. An increase in the demand for American products will appreciate the US dollar, but...

2) Inflation all by itself generally would not alter the exchange rate, but high inflation generally leads to high interest rates. Central banks usually increase interest rates to decrease inflation.

Higher interest rates will usually increase the demand of a currency which result in an appreciation of the local currency against foreign currencies. In this case, the Chinese yuan should appreciate against the US dollar.

Generally the appreciation of a currency due to high interest rates will offset the depreciation due to a negative trade balance.

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After visiting several automobile dealerships, Richard selects the car he wants. He likes its $10,500 price, but financing throu
Len [333]

Answer:

a) Total Interest Paid in 24 months is $1680

b) Total Cost of the car is $12180

c) Monthly Payment is $420

d) Annual Percentage Rate  is 10.47%

Explanation:

(a) Loan Amount = $8400

Interest Rate = 10%

Monthly Interest = 8400 x (10%/12)

                            = $70

Total Interest Paid in 24 months = 24 x 70

                                                     = $1680

(b) Total Cost of the car = Loan Amount + Interest Paid + Down payment

                                       = 8400 + 1680 + 2100

                                        = $12180

(c) Monthly Principal Payment = 8400/24

                                                  = $350

Monthly Payment = Monthly Interest Payment + Monthly Principal Payment

                              = 70 + 35

                              = $420

(d) Annual Percentage Rate = (1+ 0.10/12)12 - 1

                                              = 0.1047

                                               = 10.47%

7 0
3 years ago
A business issued a 90-day, 15% note for $91,000 to a creditor on account. Journalize the entries to record (a) the issuance of
ladessa [460]

Answer and Explanation:

The journal entries are shown below;

a. Accounts Payable $91,000

          To Note Payable  $91,000

(being the issuance of the note payable is recorded0

b Note Payable $91,000

  Interest Expense $3,412.50   ($91,000 × 15% × 90 days ÷ 360 days)

                 To Cash $94,412.50

(Being the payment of the note is recorded)

These two entries should be recorded

4 0
2 years ago
Which payment option provides consistency in on-time bill payment? A) mailing a check B)making a payment by telephone C)submitti
NNADVOKAT [17]
D, because automatic withdrawal is a schedule payment that takes place without either party having to do a thing as long as the account covera the balance.
6 0
3 years ago
Read 2 more answers
Exercise 4
Sindrei [870]

Answer:

The Kay Company

Weighted Average Cost of Capital:

a) using the book value weights = 13.1%

b) using the market value weights = 13.2%

c) Some of the factors that affect the Cost of Capital include market opportunities, capital provider's preference, market risk, inflation, reserve policy, budget surplus and deficit, trade activity, foreign trade surpluses and deficits, country risk, and finally, but not the least important, exchange rate risk.

Explanation:

a) Data and Calculations:

Capital structure as at 31st March, 2019:

                                      Based on       Based on         % Costs

                                    Book Value     Market Value

Debentures                 300,000             330,000             7

Preference                   100,000               110,000             9

Equity                        1,500,000           1,700,000            15

Debt                            200,000              180,000            10

Total                         2,100,000          2,320,000

b) The WACC (Weighted Average Cost of Capital) is the cost of capital based on the relative weights of each capital class.

c) WACC based on the Book Value weights:

= 1,500,000/2,100,000 * 15% + 300,000/2,100,000 * 7% + 100,000/2,100,000 * 9% + 200,000/2,100,000 * 10%

= 0.107 + 0.01 + 0.004 + 0.01

= 0.131

= 13.1%

d) WACC based on the Market Value weights:

= 1,700,000/2,320,000 * 15% + 330,000/2,320,000 * 7% + 110,000/2,320,000 * 9% + 180,000/2,320,000 * 10%

= 0.11 + 0.01 + 0.004 + 0.008

= 0.132

= 13.2%

8 0
3 years ago
Which of the following is an entrepreneur?
iragen [17]

Answer:

B) a computer repair shop owner who opens a second shop across town

Explanation:

6 0
3 years ago
Read 2 more answers
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