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Musya8 [376]
3 years ago
5

Assume the U.S. interest rate is 7.5 percent, the New Zealand interest rate is 6.5 percent, the spot rate of the NZ$ is $.52, an

d the one-year forward rate of the NZ$ is $.50. At the end of the year, the spot rate is $.48. Based on this information, what is the effective financing rate for a U.S. firm that takes out a one-year, uncovered NZ$ loan?
Business
1 answer:
dlinn [17]3 years ago
6 0

Answer:

about −1.7%

Explanation:

% change in pound

=$0.48-$0.52/0.52

=-0.04/0.52

=-7.7%

Effective financing rate =

(1 + 6.5%)[1 + (−7.7%)] − 1

= about −1.7%

Therefore the effective financing rate for a U.S. firm that takes out a one-year, uncovered NZ$ loan is about -1.7%

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EBIT goes from $30M to $33M; Depreciation goes from $10M to $12M; and interest expense goes from $6 M to $8M.1. What is the perc
Alekssandra [29.7K]

Answer:None of the above= 10% and 33.33%

Explanation:

Coverage ratio EBIT/Interest expenses

Change in numerator =3/30*100

Change in denominator= 2/6*100

6 0
3 years ago
Roger is new-product project manager for a medical equipment company. Recently the team has exhibited a high degree of conflict
Flauer [41]

Answer: Storming stage

               

Explanation: In simple words, it refers to the stage in which conflict between members of a group starts happening due to arise of individual personalities. This is last and most crucial stage of team development process.

In this stage the performance of team starts declining due to lack of harmony and trust among the members of the team.  In the given case, Roger's team has been facing conflict over the controlling issues ,hence, we can conclude that they are at storming stage of development.

5 0
3 years ago
Use the expenditure multiplier to calculate the change in AD that would result from a $100 million increase in government spendi
adelina 88 [10]

Answer:

If MPC is 0.8, Change in GDP    =  $500 million

If MPC is 0.95, Change in GDP =  $2,000 million

Explanation:

<em>Expenditure Multiplier is the amount by which the real GDP will change if autonomous expenditure changes by a given amount.</em>

It is calculated as follows: 1/(1-MPC).

MPC is the portion of additional income that is spent. If the MPC is 0.8, then the expenditure multiplier will be = 1/(1-0.8) = 5

Using the first scenario with an increase in government spending by $100million, the resulting change in GDP would be

Change in GDP =  change in autonomous expenditure × Multiplier

                          = 100 ×  5 = $500 million

<em>Scenario 2, MPC of 0.95</em>

Expenditure Multiplier = 1/(1-0.95) = 20

Change in GDP= 100 × 20 = $2000 million

6 0
3 years ago
The worst loss that could ever happen to a firm is referred to as the
Fantom [35]
The term you are looking for is <span>maximum possible loss.</span>
8 0
3 years ago
Equipment acquired on January 6 at a cost of $375,000 has an estimated useful life of 20 years
inessss [21]

Answer:

A. Year 1 $17,500

Year 2 $17,500

Year 3 $17,500

B. $322,500

C. Dr Cash $300,000

Dr Accumulated Depreciation-Equipment $52,500

Dr Loss on disposal of Equipment $22,500

Cr Equipment $375,000

D. Dr Cash $325,000

Dr Accumulated Depreciation-Equipment $52,500

Cr Equipment $375,000

Cr Gain on disposal of Equipment $2,500

Explanation:

A. Calculation to determine What was the annual amount of depreciation for the Years 1-3 using the straight-line method of depreciation

Year 1 Depreciation expense Year 1=($375,000-$25,000)/20 years

Year 1 Depreciation expense Year=$17,500

Year 2 Depreciation expense Year=($375,000-$25,000)/20 years

Year 2 Depreciation expense Year=$17,500

Year 3 Depreciation expense Year=($375,000-$25,000)/20 years

Year 3 Depreciation expense Year=$17,500

Therefore the annual amount of depreciation for the Years 1-3 using the straight-line method of depreciation is :

Year 1 $17,500

Year 2 $17,500

Year 3 $17,500

B. Calculation to determine What was the book value of the equipment on January 1 of Year 4

Book value of Equipment=[$375,000-($17,500*3)]

Book value of Equipment=[$375,000-$52,500)

Book value of Equipment=$322,500

Therefore the book value of the equipment on January 1 of Year 4 is $322,500

C. Preparation of the journal entry to record the sale.

Jan. 3

Dr Cash $300,000

Accumulated Depreciation-Equipment $52,500

($17,500*3)

Dr Loss on disposal of Equipment $22,500

($322,500-$300,000)

Cr Equipment $375,000

(To record sales)

D. Preparation of the journal entry to record the sale.

Jan. 3

Dr Cash $325,000

Dr Accumulated Depreciation-Equipment $52,500

($17,500*3)

Cr Equipment $375,000

Cr Gain on disposal of Equipment $2,500

($325,000+$52,500-$375,000)

(To record sales)

7 0
3 years ago
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