Answer:
1. As you have to spend more Yens for 1 USD at future date, it means that Yen is selling at discount in the forward market relative to the US Dollar.
2. The spot exchange rate is ¥132.78 per dollar, hence, total dollars Purple Panda Importers will receive today is ¥625 million/¥132.78 = $4.71 million
3. Purple Panda Importers would get more dollars if the Japanese firm paid off its account <u>today</u>.That is, he will get more money if the account is paid today.
Answer:
$2,400
Explanation:
The computation of the depreciation expense under the activity-based depreciation method is shown below:
= (Original cost - residual value) ÷ (estimated production units)
= ($12,000 - $4,000) ÷ (20,000 units)
= ($8,000) ÷ (20,000 units)
= $0.4 per unit
Now for the first year, it would be
= Production units in first year × depreciation per unit
= 6,000 units × $0.4
= $2,400
Answer:
d. The present value of perpetuity varies directly with the annual repayments.
Explanation:
A perpetuity is a security or bond which pays a fixed amount of cash flow at a fixed interval forever. So the amount it pays stays the same and it keeps paying for ever. The formula to find the present value of a perpetuity is
Cash flow of perpetuity/Interest Rate
So if the annual payment is 100 and the interest rate is 5% the present value of the annuity is
100/0.05=2,000
If we keep the interest rate the same at 5% and increase the cash flow by 100 to 200 the new present value of the perpetuity is
200/0.05=4,000
This proves that the present value of a perpetuity varies directly with the annual repayments or cash flow of perpetuity.
Answer:
b. substitutes
b. competitive intelligence.
Explanation:
In the context, Paul and his wife wishes to open up a new restaurant in Beaufort and did much of analysis and research before taking any decision and studying the restaurant industry market.
The factor that Paul have considered in analyzing the competitive environment is the substitutes. The competitive environment as described by Michael Porter includes customers, substitutes, suppliers, new entrants, compliments and other rival firms.
The information Paul has collected in the competition analysis can be referred to -- competitive intelligence.
Competitive intelligence may be defined as the information that is necessary in deciding how best to manage in the competitive environment that the managers have identified.
