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3 years ago

An example of transaction exposure is when:__________.

Business

1 answer:

makkiz [27]3 years ago

8 0

Answer: companies have obligations for the purchase of goods at previously agreed prices.

Explanation:

Transaction exposure is the uncertainty

that is typically faced by businesses that are involved in international trade. It is the risk that there will be a fluctuation in the currency exchange rates after a firm might have already taken part in a financial obligation.

Therefore, an example of transaction exposure from the question will be when companies have obligations for the purchase of goods at previously agreed prices.

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The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Delacour, Inc. for

aivan3 [116]

Answer:

$2040

Explanation:

FIFO under the perpetual inventory system is one in which the sale or purchase of inventory is immediately updated in the inventory account such that the true position of inventory available per time is known.

FIFO is first in first out which means that inventory purchased first are sold first.

Given;

Units Unit Cost Total Cost Units Sold

Beginning Inventory 30 $28 $ 840

Sale No. 1 20

Purchase No. 1 50 $40 $2,000

Sale No. 2 40

Purchase No. 2 20 $44 $880

Totals 100 $3,720 60

Cost of goods sold = $28 * 20 + $28 * 10 + $40 * 30

= $560 + $280 + $1200

= $2040

5 0

3 years ago

Which of the following constitutes an implicit cost to company A

Anna [14]

Answer:

Implicit cost to company A is:

D. value of the land owned by the company A

Explanation:

Implicit costs to company A will refer to the cost of resources already owned by the firm, which the company could have put to some other use. A good example is the value of the land owned by the company. This land could be put to another use, yielding some rent. It could also be sold outright. Its cost becomes implicit when the company uses it in its business. The land is not being held for sale.

7 0

3 years ago

Wine and Roses, Inc., offers a bond with a coupon of 9.0 percent with semiannual payments and a yield to maturity of 9.78 percen

Mariana [72]

Answer:

The market price of the $1,000 face value bond is $961.12.

Explanation:

This can be calculated as follows:

Step 1: Calculation of the present value of the coupon (PVC) cash payments flow

To calculate this, we use the formula for calculating the PV of an ordinary annuity as follows:

PVC = P × [{1 - [1 ÷ (1+r)]^n} ÷ r] …………………………………. (1)

Where;

PVC = Present value of the coupon (PVC) payment = ?

P = Semiannual coupon amount = $1,000 × (9.0%/2) = $45

r = Yield to maturity rate = 9.78% annual = 9.78% ÷ 2 semiannually = 4.87% or 0.0487 semiannually

n = number of period = 7 years = 7 × 2 semiannul = 14 semiannual

Substitute the values into equation (1) to have:

PVC = 45 × [{1 - [1 ÷ (1+0.0487)]^14} ÷ 0.0487] = $448.59

Step 2: Calculation of the present value of the face value (PVFAV) of the bond

Since this is just a single amount, not a flow, we use the simple PV formula as follows:

PVFAV = FAV ÷ (1 + r)^n ……………………………………. (2)

Where;

PVFAC = Present value of the face value of the bond = ?

FAC = Face value of the bond = $1,000

r and n are as given in step 1 above

Substitute the values into equation (2) to have:

PVFAV = FAV ÷ (1 + 0.0487)^14 = $512.53

Step 3: Calculation of the market price of a $1,000 face value bond

The market price of a bond is the addition of the PV of expected cash flows and PV of the face value of the bond. For this question, the market price of a $1,000 face value bond can be calculated as follows:

Market price of the bond = PVC + PVFAC …………………………… (3)

Substituting the values already obtained in steps 1 and 2 above into equation (3), we have:

Market price of the bond = $448.59 + $512.53 = $961.12

Therefore, the market price of the $1,000 face value bond is $961.12.

6 0

3 years ago

Great Lakes Packing has two bond issues outstanding. The first issue has a coupon rate of 3.50 percent, a par value of $1,000 pe

katrin [286]

Answer:

2.9652%

Explanation:

to determine the cost of debt we must use the FMV of the bonds plus the YTM:

first bond:

FMV = 1.09 x $1,000 = $1,090 x 3,600 bonds = $3,924,000

YTM = {C + [(F - P)/n]} / [(F + P)/2] = {17.5 + [(1000 - 1090)/16]} / [(1000 + 1090)/2] = (17.5 - 5.625) / 1045 = 1.136% x 2 = 2.27% annual

second bond:

FMV = 0.95 x $2,000 = $1,900 x 3,950 bonds = $7,505,000

YTM = {C + [(F - P)/n]} / [(F + P)/2] = {59.4 + [(2000 - 1900)/42]} / [(2000 + 1900)/2] = (59.4 + 2.38) / 1950 = 3.168% x 2 = 6.34% annual

total debt = $3,924,000 + $7,505,000 = $11,429,000

weighted average after tax cost of debt:

{($3,924,000/$11,429,000 x 2.27%) + ($7,505,000/$11,429,000 x 6.34%)} x (1 - 0.40) = (0.779% + 4.163%) x 0.6 = 4.942% x 0.6 = 2.9652%

6 0

4 years ago

Pulo Corporation uses a weighted-average process costing system. The company has two processing departments. Production starts i

Solnce55 [7]

Answer:

The correct answer is: units started in production in Finishing for April.

Explanation:

It is an analysis of the activity of the department or cost center for the period. All costs attributable to a department or cost center are presented according to the elements of the cost center. A production cost report for each department can be prepared following a four-step approach. Each step represents a separate plan and the four plans together constitute a report of the cost of production.

Step 1: Post the physical flow of units (quantity plan) .

Step 2: Calculate the equivalent production units (equivalent production plan).

Step 3: Accumulate the total and unit costs that will be accounted for by department (cost plan to be accounted for).

Step 4: Assign the accumulated costs to the units transferred or still in process (cost plan accounted for).

3 0

3 years ago