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Zarrin [17]
3 years ago
9

The current U.S. dollarminusyen spot rate is 125yen​/$. If the 90minusday forward exchange rate is 127 yen​/$ then the yen is se

lling at a per annum​ ________ of​ ________.
Business
2 answers:
Anarel [89]3 years ago
7 0

Answer: The yen is selling at a per annum "DISCOUNT of -6.30%"

Explanation: This is a per annum discount, because the amount of dollar used in buying the yen has reduced, which made the $1 to be able to buy 127yen instead of 125yen.

To find the forward discount;

[(1 ÷ forward rate) - (1 ÷ spot rate) / (1 ÷ spot rate)] × (360 ÷ 90)

Spot rate = 125

Forward rate = 127

Therefore forward discount is

[(1÷127) - (1÷125) / (1÷125)] × (360÷90)

(-0.000126 / 0.008) × 4 = -0.063

Therefore forward discount = -6.30%

The negative sign means that it is a percentage discount

I am Lyosha [343]3 years ago
3 0

Answer:

1. Discount

2. 6.30%

Explanation:

1. Forward discount means that more units of a currency is needed to a unit of another currency in the future. In the question, 2 (127 - 125  = 2) more units of yen will be needed in the future to buy the same one unit of the US dollar.

2. To calculate the percentage of the forward discount, we use the forward discount formula as follows:

Forward discount = {[(1 ÷ Forward rate) - (1 ÷ Spot rate)] ÷ [1 ÷ Spot rate]} x {360 ÷ 90)}

Forward discount = {[(1 ÷ 127) - (1 ÷ 125)] ÷ [1 ÷ 125]} × {360 ÷ 90}

                              = {[0.007874016  - 0.008 ] ÷ [0.008]} × 4

                              = {-0.000125984  ÷ 0.008} × 4

                              = -0.015748 × 4

                              = -0.062992  = - 6.30% approximately.

Therefore, the negative sign shows that the yen is selling at a per annum​ discount of​ 6.30%. This indicates yen worth less in the future against the US dollar.

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Indiana Co. began a construction project in 2021 with a contract price of $163 million to be received when the project is comple
iragen [17]

Answer: Recognized $12.68 million gross profit on the project in 2022

Explanation:

Firstly we would need to ascertain the percentage of completion in 2022. We will do this by using the costs.

The cost incurred till date is,

= $32 million (incurred in 2021) + $59 million (incurred in 2022)

= $91 million. (1)

A further $37 million is estimated to remain in costs by project completion so the total cost would be,

= $91 million + 37 million

= $128 million is the total cost to be incurred. (2)

Dividing (1) by (2) to find out how much costs have been incurred vs how much is life we have,

= 91 / 128

= 0.7109

= 71 %

71 % of the project has been completed.

We will now find out the revenue for that very year using the percentage of the project completed.

The Total Revenue is $163 million so we will take 71% of that,

= 0.71(163)

= $115.73 million can be recognized as revenue TILL DATE. (3)

To find out the Revenue for the year then we can deduct the revenue of the previous year from the Revenue till date to find out the revenue for 2022.

But first we need to find the revenue of 2021 using the same method we used to calculate the Revenue this far

= 32 million / (32 + 86 million) * 163 million

= $44.01 million in revenue in 2021 (4)

Subtracting (4) from (3) to get the revenue for 2022 we have,

= 115.73 - 44.01

= $71.72 million is therefore the revenue for the year 2022

Calculating the gross profit for the year 2022 then we can subtract the cost in 2022 from the revenue for 2022.

= 71.72 million - 59 million

= $12.72 million

The answer we got is off by $0.04 from option C so we will pick Option C as the correct answer with the discrepancy going down to rounding off errors in the Intermediate Calculation.

8 0
3 years ago
_____ was established by the Better Business Bureau to evaluate ads directed at children based on guidelines that encourage sens
kaheart [24]

Review Unit for Children's Advertising  was established by the Better Business Bureau to evaluate ads directed at children based on guidelines that encourage sensitivity to their level of sophistication and knowledge, as well as an emphasis on positive social traits such as friendship and kindness.

<u>Explanation: </u>

In 1974, the US self regulatory organization was created by the National Advertising Review Board. The Children's Advertising Review Unit is an organization of the Council of Better Business Bureaus, basically has two missions:  

  1. to protect kids from misleading or unwanted coverage across all channels and;  
  2. CARU partners with companies in order they conform to all relevant legislation and the autonomous CARU standards which take account of the exceptionally impressive and disadvantaged children's audience, both marketing and data collection practices.

When advertising or data gathering practices are discovered to be ambiguous, improper or inconsistent with the CARU guidelines, CARU aims to change through voluntary participation between companies.

4 0
3 years ago
Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a correspondent bank at a price
Bad White [126]

Answer:

a. 10.60%

b. 3.53%

Explanation:

a. Calculate the yield on the repo if it has a 5-day maturity.

Profit = $34,000,000 − $33,950,000 = $50,000

Using 360 days a year, we have:

Yield on the repo = ($50,000/$33,950,000)*(360/5) = 0.1060, or 10.60%

b. Calculate the yield on the repo if it has a 15-day maturity.

Using 360 days a year also, we have:

Yield on the repo = ($50,000/$33,950,000)*(360/15) = 0.0353, or 3.53%

3 0
3 years ago
Your buddy in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes
m_a_m_a [10]

Answer:

 

Explanation:

a ) We shall calculate the NPV of the project . If it is positive , then money can be invested

Cash outflow in the beginning =1000

Present value of perpetual annuity of 100 at 9.5 %

100 / .095

= 1052.63

which is more than initial cash outflow

So NPV is positive

Hence money can be invested.

b )

If machine takes one year to build , first year cash outflow of 100 will be absent

Present value of 100 after 1 year

= 100 / 1.095

= 91.32

So present value of annuity

= 1052.63 - 91.32

= 961.31

This is less than 1000 so

NPV is negative.

Hence money can not be invested.

5 0
4 years ago
Question 9 (1 point) The consumption functions shows a Question 9 options: negative relationship between consumption and disposa
evablogger [386]

Answer:

positive relationship between consumption and disposable income

Explanation:

The consumption function shows the relationship between consumer spending and disposable income.

the formula used to calculate consumption function is:

C = A + MY

  • C = consumer spending
  • A = autonomous spending
  • M = MPC or marginal propensity to consume
  • Y = disposable income

The consumption function has a upward slope since the relationship between consumer spending and disposable income is always positive, i.e. the more disposable income you have, the more you will consume.

4 0
3 years ago
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