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vova2212 [387]
3 years ago
13

Celine Co. will need €500,000 in 90 days to pay for German imports. Today's 90-day forward rate of the euro is $1.07. There is a

40 percent chance that the spot rate of the euro in 90 days will be $1.02, and a 60 percent chance that the spot rate of the euro in 90 days will be $1.09. Based on this information, the expected value of the real cost of hedging payables is $____. A. 25,000 B. -1,000 C. 4,000 D. -35,000
Business
1 answer:
harkovskaia [24]3 years ago
7 0

Answer:

$1,000

Explanation:

The computation of the expected value of the real cost of hedging payable is shown below:-

Real cost of hedging 1 = (€500,000 × $1.07 × (90 ÷ 360)) - (€500,000 × $1.02 × (90 ÷ 360))  

= $133,750 - $127,500

= $6,250

Real cost of hedging 2 = (€500,000 × $1.07 × (90 ÷ 360)) - (€500,000 × $1.09 × (90 ÷ 360))

= $133,750 - $136,250

= -$2,500

Expected value of the real cost of hedging payable = (Real cost of hedging 1 × Spot rate Given Percentage) + (Real cost of hedging 2 × Given percentage)

= ($6,250 × 0.40) + (-$2,500 × 0.60)

= $2,500 - $1,500

= $1,000

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Stephanie is looking to replace her coffee maker that only makes four pots of coffee. She wants a coffee maker that produces mor
frutty [35]

Answer:

The size of the coffee maker describes a requirement characteristic when Stephanie purchases her coffee maker

Explanation:

Stephanie has a space constraint in her kitchen as well as output constraint with respect to the existing coffee maker,hence,in resolving the two issues she has opted a smaller coffee maker that can turn out more coffee pots.

In order to strike a balance between two opposing views,Stephanie could either create more to accommodate a bigger coffee maker or buys a smaller super-efficient coffee maker that is more expensive.

Without, I think Stephanie would prefer the latter suggestion

4 0
3 years ago
RLW-II Enterprises estimated that indirect manufacturing costs for the year would be $60 million and that 12,000 machine hours w
Montano1993 [528]

Answer: $3,150,000

Explanation:

Total cost of production will be the total sum of the material costs, labor costs and indirect costs.

Indirect Costs

It was estimated that 12,000 machine hours would be used at a cost of $60 million.

Indirect cost per machine hour is;

= 60,000,000/12,000

= $5,000 per hour

With 200 machine hours, indirect cost is;

= 200 * 5,000

= $1,000,000

Total cost of production = 1,250,000 + 900,000 + 1,000,000

= $3,150,000

5 0
3 years ago
Sarah's Muffler Shop has one standard muffler that fits a large variety of cars. Sarah wishes to establish a reorder point syste
GarryVolchara [31]

Answer:

Following is the solution for the given problem.

Explanation:

Best order size, EOQ =√2DS/H

EOQ = √2*4700*60/5

EOQ = 336 units.

D = 4700/300 = 15.66.

σ L= √∑σ²

= √3*(5)² = 8.66.

Reorder point, R = D*L+ z σ L

Reorder point, R = 15.66*3 + 1.282*8.66

Reorder point, R = 58 units.

4 0
3 years ago
Received contributions of $ 10 comma 000$10,000 in exchange for common stock. a. Increase asset (Cash) ; Increase equity (Common
MakcuM [25]

Answer:

The answer is stated below:

Explanation:

A. Received or collected $10,000 in exchange of the common stock:

This transaction will have an impact on the Accounting Equation of the Accounts, which is :

Assets = Liabilities + Equity

As the cash is received, there will be an increase in the assets and under the cash account of the current assets. Though the cash is against the common stock, which increases the common stock account upon the side of the equity.

Therefore, it will be:

Increase in assets (Cash) : Increase in equity (Common Stock)

B. Bought the equipment on account worth $5,000.

This transaction will have an impact on the Accounting Equation as:

As the equipment is purchased will in turn lead to increase in the assets side, under the equipment account and it is purchased on account, which means on credit, that leads to increase in the liability under the Accounts Payable account.

Therefore, it will be:

Increase in assets (Equipment) : Increase in Liability (Accounts Payable)

6 0
3 years ago
Which would be an example of sustainable development? a. Current use of fossil fuels in the U.S. b. Heap-leach extraction of gol
Setler [38]

Answer:

The correct answer is letter "D": Development of brownfields in urban areas.

Explanation:

In urban planning, sustainable development refers to continuous activities that can be performed during extended periods of time. They are the result of repeated patterns of individuals who, sometimes unconsciously, provoke more and more individuals to repeat their actions.

Under such a scenario, <em>the development of brownfields in urban areas is the result of building more department complexes in the cities because of the increasing need for renting and selling houses as a result of the increasing population growth.</em>

5 0
3 years ago
Read 2 more answers
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