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Anarel [89]
3 years ago
11

Your firm has a British customer that is willing to place a $1 million order, but wants to pay in pounds instead of dollars. The

spot exchange rate is $1.85 = £1.00 and the one-year forward rate is $1.90 = £1.00. The lead time on the order is such that payment is due in one year. What is the fairest exchange rate to use?
Business
1 answer:
sammy [17]3 years ago
7 0

Answer:

The parties should use the one-year exchange rate to disclosure the contract in their books.

Explanation:

The spot rate is used when the exchange of pounds for dollars occurs immediately. For the current scenario, this rate is not appropriate.

The parties should use the one-year exchange rate to disclosure the contract in their books.

At the time of payment, they will use the spot rate of that date and made the adjustment needed.

The British firm should purchase 1 million forward to seal the exchange rate, and not incur currency risk.

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Answer:

Correct answer is A, They know how to oversell their product so the customer can't say no. Explanation: Good salespeople are those who sell more and more of their company's product.

3 0
3 years ago
Leather Shop earned net income of $ 71,000 after deducting depreciation of $ 5,000 and all other expenses. Current assets decrea
Thepotemich [5.8K]

Answer:

$89,000

Explanation:

Given that,

Net Income = $71,000

Depreciation = $5,000

Increase in Current Liabilities = $9,000

Decrease in Current Assets = $4,000

Net Cash from Operating Activities:

= Net Income + Depreciation + Increase in Current Liabilities + Decrease in Current Assets

= $71,000 + $5,000 + $9,000 + $4,000

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7 0
3 years ago
Suppose that for each one-percentage-point increase in the interest rate, the level of investment spending declines by $1 billio
elixir [45]

Answer:

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5 0
3 years ago
The economy is in a recession and the government wants to increase output. If the multiplier equals 3 and the government increas
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Answer:

The correct answer is option D.

Explanation:

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The increase in output will be

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=250\ \times\ 3

=750

So, the correct answer is option D.

8 0
3 years ago
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Alex787 [66]

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This type of doctrine is no longer the main doctrine used in most U.S states by the 20th century, but it was commonplace during the late 19th century.

8 0
3 years ago
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