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dybincka [34]
2 years ago
7

You are considering a project in Norway with an initial cost of NKr135,000. The project is expected to return a one-time payment

of NKr200,000 at the end of Year 5. The risk-free rate of return is 2.6 percent in the U.S. and 3.1 percent in Norway. The inflation rate is 1.6 percent in the U.S. and 2.3 percent in Norway. Currently, the exchange rate is $1= NKr7.0305. Approximately how much will the payment at the end of 5 Years be worth in U.S. dollars?
a. $27,747
b. $28,108
c. $27,472
d. $28,311
e. $27,006
Business
1 answer:
MA_775_DIABLO [31]2 years ago
8 0

Answer:

The payment will be approximately at the end of 5 Years of $27,764.28, so option a is the correct one

Explanation:

In order to calcualte The exchange rate at the end of five years is we have to use the following formula:

= 7.0305 * {(1+ interest rate in Norway)/(Interest rate in US)}^5

= 7.0305 * [(1.031)/(1.026)]^5

= Nkr 7.2035 / $

= $1/7.2035 / Nkr

= $0.1388 / Nkr

Henche, The payment to be recieved at the end of 5 years will be NKr 200,000, therefore the value of the payment in dollars is = $27,764.28

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Scott Company sells merchandise with a one-year warranty. Sales consisted of 2,500 units in Year 1 and 2,000 units in Year 2. It
Alenkasestr [34]

Answer:

$0

Explanation:

Scott Company must record the warranty expense and liability regarding the products sold during the years that they occur. For example, the following journal entry must be made to record the warranty expense for year 1:

Dr Warranty expense 25,000

    Cr Warranty liability 25,000

During year 2, they will record the warranty expense for that year:

Dr Warranty expense 20,000

    Cr Warranty liability 20,000

That means that during year 3, the only warranty expense recorded will be the one related to the goods sold during that year.

8 0
3 years ago
An organization has a standing order with a supplier. the organization has ordered the same product in the same quantity monthly
evablogger [386]

Answer:

Modified Rebuy.

Explanation:

Modified Rebuy can be defined as the desires of a buyer to re-purchase or reorder the products previously bought but with certain modifications either in prices, products, suppliers, or terms. The buyer may modify the current purchasing terms because he may not be satisfied with the supplier or may have some new requirements.

In the given case, the modification in supplier has been made by the organization to get a better price. Thus this is an example of modified rebuy.

So, the correct answer is modified rebuy.

7 0
2 years ago
GenX has a target capital structure of 40 percent common stock, 5 percent preferred stock, and 55 percent debt. Its cost of equi
AVprozaik [17]

Answer:

12.085 %

Explanation:

WACC = Cost of Equity x Weight of Equity + Cost of Preference Stock x Weight of Preference Stock + Cost of Debt x Weight of Debt

Remember to use the after tax cost of debt :

after tax cost of debt = interest x ( 1 - tax rate)

                                   = 8.00 % x (1 - 0.35)

                                   = 5.20 %

therefore,

WACC = 22.00 % x 0.40 + 8.50 % x 0.05 + 5.20 % x 0.55

           = 12.085 %

thus

the firm's WACC given a tax rate of 35 percent is 12.085 %

6 0
3 years ago
Eastwood Post Pavillion received a $650 check from a customer for the balance due. The transaction was erroneously recorded as a
s344n2d4d5 [400]

Explanation:

The correct journal entry is as follows:

Cash Dr $90

Service revenue Dr $560

         To Account receivable $650

(Being the cash received is recorded)

Basically we debited the cash for $90 and service revenue for $560 and credited the account receivable for $650 so that the correct posting could be done

The cash difference is

= $650 - $560

= $90

3 0
3 years ago
Check my work Check My Work button is now enabled3Item 5Item 5 10 points Social Media, Inc. (SMI) has two services for users. To
Nimfa-mama [501]

Answer:

a. Predetermined administration costs - $ 54 per engineering hours

b. Profit per Toot  - $ 648,075

   Profit per Tix       $ 326,450

Explanation:

Computation for predetermined overhead rate for admin costs

Estimated administration costs                                              $ 629,100

Engineering hours - Toot -  6,825

Engineering hours - Tix    -  <u>4,825</u>

Total engineering hours                                                              11,650

Predetermined rate for administration costs

$ 629,100/ 11,650 hours                                                       $ 54 per hour

Computation of total profit for each service

Administration costs - Toot = 6,825 hours * $ 54 per hour = $ 368,550

Administration costs - Tix =   4,825 hours * $ 54 per hour = $  260,550

                                                              Toot                Tix

                                                                 $                    $

Revenues                                            <u>1,350,000</u>       <u>1,040,000</u>

Engineering costs                                 333,375           453,000

Allocation of admin costs                     <u>368,550 </u>         <u>260,550</u>

Total costs                                              <u>701,925 </u>          <u>713,550</u>

Profit per service                                    648,075          326,450                          

5 0
3 years ago
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