1.Interest rates
The interest rate level is moved higher or lower by a country's central bank to either stimulate or slow down an economy. Higher interest rates impose a more costly fee to borrow money while lower interest rates lessen the fee and usually spur more borrowing
2.Economic growth
The strength of an economy can go a long way to boosting the strength of the nation's currency. A strong growth rate in a country will see a growing demand for products and services with better job prospects for workers as well as being an attractive destination for capital and investments.
3.Inflation
When a product rises in price, it signals that there is an underlying demand for that product. Higher prices may not seem good to a consumer, but it is generally considered healthy for a country to have a moderate increase in inflation in a growing economy.
Answer:
a)
Project Y and Project Z
b)
Project X and Project Y
c)
Project X and Project Z
Explanation:
Apply the CAPM to calculate the required return for each project as followed:
Project W: 4% + 0.75 * (11%-4%) = 9.25%
Project X: 4% + 0.90 * (11%-4%) = 10.3%
Project Y: 4% + 1.15 * (11%-4%) = 12.05%
Project Z: 4% + 1.45 * (11%-4%) = 14.15%
So, for:
a)
Which projects have a higher expected return than the firms 11 percent cost of capital: Project Y 12.8% and Project Z 13.9% which are given.
b)
Project should be accepted is project that has expected returns higher than required return which is Project X and Project Y.
c)
Using the firm's overall cost of capital as a hurdle rate:
Project Z will be accepted which is incorrect because its Required returned is higher than its expected returns ( 14.15% > 13.9%)
Project X will be rejected which is incorrect because its Required returned is lower than its expected returns ( 10.3% < 10.8%).
Answer:
23.08%
Explanation:
The computation of the debt ratio is shown below:
Debt amount
= 2 million × 0.90
= 1.80 million
And,
Equity amount
= 2 million × 3
= 6 million
Now
debt ratio = debt amount ÷ (amount of debt + amount of equity)
= 1.80 million ÷ ( 6 million + 1.80 million)
= 23.08%
Answer:
Date Account Titles and Explanation Debit Credit
Inventory $3,124,089
Account payable $3,124,089
(To record purchase of merchandise inventory)
Account receivables $6,909,879
Sales revenues $6,909,879
(To record sales on account)
Cost of goods sold $3,456,980
Inventory $3,456,980
(To record the cost of sales)
Answer:
Coat Tech’s workers have Sequential interdependence..
Explanation:
Sequential interdependence occurs when one unit in the overall process produces an output necessary for the performance by the next unit.
