Answer:D. reject the offer because it will produce a net loss $21,000
Explanation:
Net income or loss is the total of firm's income less it's total cost( fixed and variable) . The contract will result in a loss $5 per unit which multiply by the total units of 4200 gives $21,000
Answer:
D. increase; decrease
Explanation:
When foreign imposes a tariff on import from home then there will be decreaing the import leading to a decreased demand of domestic currency by foreigners.
Therefore, domestic currency will depreciate and foreign currency will appreciate thus this action will lead to real home/Foreign rate to increase and will decrease the nominal home/foreign exchange rate.
Answer:
The interest expense company recorded during Year 2 on the 7% debentures is $27,535,600
Explanation:
As the interest expense is different from the interest payment made on the debenture. It also includes some other costs. Effective interest rate includes the effects of all related costs of debentures. So the interest expense of a debenture will base the effective interest rate of the debenture.
We can calculate the Interest expense on 7% debtures as below
Interest Expense = Value of Debenture x Effective interest rate
Interest Expense = $188,600,000 x 14.6%
Interest Expense = $27,535,600
