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arsen [322]
3 years ago
10

ssume that interest rate parity exists. You expect that the one-year nominal interest rate in the U.S. is 7%, while the one-year

nominal interest rate in Australia is 11%. The spot rate of the Australian dollar is $.60. You will need 10 million Australian dollars in one year. Today, you purchase a one-year forward contract in Australian dollars. How many U.S. dollars will you need in one year to fulfill your forward contract? A. $5,784,000 B. $5,387,000 C. $6,184,000 D. $8,356,000
Business
1 answer:
EleoNora [17]3 years ago
8 0

Answer:

The answer is A. $5,784,000

Explanation:

[(1.08)/(1.11)] -1 = -3.6%

Thus one year forward rate is 0.60*[1 +(0.036)] = $5784

$5784 * 10 000 000= <u>$5,784,000</u>

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What do you hope to gain from the course of economic development?​
Slav-nsk [51]

Explanation:

An economics degree gives you a high level of mathematical and statistical skills and the ability to apply economic principles and models to problems in business, finance and the public sector. ... numeracy - handling complex data and techniques of mathematical and statistical analysis. problem-solving. analytical skills

8 0
3 years ago
The president of the company you work for has asked you to evaluate the proposed acquisition of a new chromatograph for the firm
Tems11 [23]

Answer:

Part A)

Year 0 net cash flow would comprise of basic price, modification cost and requirement for net working capital. The formula for cash flow in Year 0 would be:

Year 0 Net Cash Flow = -Basic Price - Modification Cost - NWC

______________

Using the values provided in the question, we get,

Year 0 Net Cash Flow = -190,000 - 47,500 - 9,500 = -$247,000

______________________

Part B:

Year 1, 2 and 3 would required adjustment for depreciation charges (under MACRS) against expected savings. The depreciation rates for 3 year class asset would be 33%, 45% and 15% for Year 1, Year 2 and Year 3 respectively.

Depreciation would be calculated on the equipment's basic price and modification cost.

The formula that can be used to calculate the net operating cash flow would be:

Net Operating Cash Flow = (Sales - Depreciation)*(1-Tax Rate) + Depreciation

______________

Using the values provided in the question, we get, the table in the attached file

Important Information:

Depreciation (Year 1) = (190,000 + 47,500)*33% = $78,375

Depreciation (Year 2) = (190,000 + 47,500)*45% = $106,875

Depreciation (Year 3) = (190,000 + 47,500)*15% = $35,625

______________________

Part C:

Additional non operating cash flow would consist of after-tax salvage value and return of net working capital. Relevant formulas are:

Additional Non Operating Cash Flow = After Tax Salvage Value + Return of Net Working Capital

After Tax Salvage Value = Sales Value +/- Tax on Loss/Gain from Sale of Asset

Loss/Gain from Sale of Asset = Sales Value - Book Value

Book Value = (Basic Price + Modification Cost)*(1-(33%+45%+15%))

______________

Using the above mentioned formulas, we get,

Book Value = (190000 + 47500)*(1-(33%+45%+15%)) = $16,625

Gain on Sale of Equipment = 66,500 - 16,625 = $49,875

Tax on Gain = $49,875*30% = $14,962.50

After Tax Salvage Value = 66,500 - 14,962.50 = $51,537.50

_____________________

Additional (Non Operating) Cash Flow = $51,537.50 + $9,500 = $61,037.50 or $61,038

Explanation:

8 0
3 years ago
The unintended consequences of an economic change that are not immediately identifiable but are felt only with time are known in
sineoko [7]

We can actually deduce here that the unintended consequences of an economic change that are not immediately identifiable but are felt only with time are known in economics as: D. Secondary effects.

<h3>What is unintended consequence?</h3>

Unintended consequence, as seen in social sciences are known to be the result or outcome that is gotten from a purposeful action which were not seen coming.

The options that complete the question are:

a. scarcity constraints.

b. marginal effects.

c. opportunity costs.

d. secondary effects

We can actually deduce here that such unintended consequences of an economic change that are not immediately identifiable but are felt only with time are known in economics are known to be secondary effects.

Learn more about unintended consequence on brainly.com/question/17228614

#SPJ1

8 0
1 year ago
Confectioners, a chain of candy stores, purchases its candy in bulk from its suppliers. For a recent shipment, the company paid
grandymaker [24]

Answer:

$0.215

Explanation:

The computation of the cost per item in Group 1 is shown below:-

Candy amount paid = $3,100

Item received = 7,100

For Group 1

Sale value = Group 1 units × Selling price

= 2,110 × $0.15

= $316.5

For Group 2

Sale value = Group 2 units × Selling price

= 4,720 × $0.35

= $1,652

For Group 3

Sale value = Group 3 units × Selling price

= 270 × $0.71

= $191.7

= Total sale value = $316.5 + $1,652 + $191.7

= $2,160.2

So, Sale percentage for Group 1 = $316.5 ÷ $2,160.2

= 14.65%

Now, the proportion of cost for Group 1

= $3,100 × 14.65%

= 454.15

Cost per unit = Proportion cost ÷ Group 1 units

= $454.15 ÷ 2,110

= $0.215

4 0
3 years ago
On January 1, Company A leased equipment for a six-year period. Annual lease payments are $12,000 due on December 31 of each yea
raketka [301]

Answer:

Dr Right of use asset 59,007.60

    Cr Lease liability 59,007.60

Explanation:

Variable lease payments are generally not included as right of use asset or lease liability. Even though a 60% possibility exists that an additional $5,000 will be paid, they are not based on an index and are not disguised payments (only two exceptions to this rule).

Annual lease payments = $12,000

PV annuity factor, 6%, 6 periods = 4.9173

PV of lease payments = $12,000 x 4.9173 = $59,007.60

3 0
3 years ago
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