Answer: 1. A.Both firms will choose the low price.
2. B. Both firms would choose the high price.
Explanation:
1. If the firms cannot cooperate with each other and must choose simultaneously, both firms will choose the low price.
This is because at the low price both of them are at the highest profit they can make when they are not cooperating. For instance, if Firm B chooses Low Price and Firm A chooses High Price, Firm A will make $3 million while Firm be will make $8 million.
If Firm B decides to have a high price then firm A will take the low price and make $8 million in profit while Firm B makes $4 million. If they are not working together, they will both have to take the low price to make the most profit.
2. If the firms could cooperate with each other, both firms would choose the high price.
The is because they will be making more than competing and getting a lower profit. Should they cooperate they will each get $7 million in profit because they will pick the option they can both make the highest profit at. The is better than competing and making only $5 and $6 million respectively.
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Answer:
the six month euro interest rate is 1.36%
Explanation:
Spot exchange rate: 1.4 USD/ EUR
6 month forward rate: 1.3950 USD/EUR
Domestic interest rate: 1% pa
Foreign interest rate: the six month euro interest rate?
We have the formula:
Forward rates = Spot rate * (1+domestic interest rate)/(1+foreign interest rate)
⇔ 1.3950 = 1.4 *(1+1%)/(1+foreign interest rate)
⇔ 1+foreign interest rate = 1.4 *(1+1%)/1.3950
⇔foreign interest rate = 1.01362 - 1 = 0.01362
⇒ the six month euro interest rate is 1.36%
Answer:
D) Shifts in aggregate demand are often the result of waves of pessimism or optimism among consumers and businesses.
Explanation:
The Federal Reserve (FED) can respond to excessive pessimism among consumers and businesses by expanding the money supply and lowering interest rates. To deal with excessive optimism they can do the opposite, they can shrink the money supply and increase the interest rate.
Answer:
Explanation:
Given:
Product B1
#of setups 20
machining hours 4000
Orders packed 350
#of products manufactured 400
Setup dep overhead = 15,000
Machining dep overhead = 165,000
packing department overhead = 60,000
Overhead assigned to B1:
20/40 *15,000 = 7,500
4000/5000 *165,000 = 132,000
350/500 *60,000 = 42,000
Total = 181,500
Answer:
The Net Cash <em>used</em> in Financing activities is $30,800
Explanation:
<em>Step 1 Determine the Movement in Cash during the period.</em>
Movement = Ending Cash Balance - Beginning Cash Balance \
= 18,200 - 11,600
= 6,600 (inflow)
<em>Step 2 Determine the Cash flow in Financing Activities </em>
<u>Cash flow statement for the year</u>
Cash flow from Operating Activities $29,000
Net Cash flow from Investing Activities $ 8,400
Net Cash flow from Financing Activities (Balancing figure) ($30,800)
Movement in Cash during the year $6,600
Therefore, The Net Cash used in Financing activities is $30,800
