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3 years ago

how can good boilerplate tersm and conditions of contract still fail to protect an orgnaization against some risk

Business

1 answer:

goldfiish [28.3K]3 years ago

8 0

Answer:

A boilerplate terms and conditions of contract are used for efficiency and to increase standardization in the contract’s structure and language. These are important to address a range of things such as what happens if a document is declared unenforceable, how disputes will be resolved between two parties and, which laws govern the contract, etc. The purpose of boilerplate’s terms and conditions is to protect the interest of all parties that sign the contract.

Boilerplate terms and conditions hold the company in good stead most of the times. But different companies have different styles of working, different vendors and are faced with different challenges on a day-to-day basis. Based on these parameters, some level of customization is needed in the terms and conditions of the company. Moreover, the company cannot control the external factors and they are the major sources of risk. Because of the high volatility of external factors, companies following boilerplate terms and conditions are risk-prone.

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You are an American real estate mogul. You have just purchased a chain of boutique hotels in the Swiss Alps for CHF 35,000,000.

IRINA_888 [86]

Answer:

Since the investor is from the US and purchases a hotel in Swiss Alps for CHF 35,000,000, the investor will have to pay interest in the currency CHF.

In order to hedge the currency risk the investor can go for SWAPS where he will recieve the interest in CHF and pay in USD.

Cash flow:

Notional amount = $35,000,000

exchange rate = CHF 1 / USD

Bid price is 5.25% for CHF hence when an investor goes into swap contract then he will get 5.25%. Similarly for USD when investor pays in USD then he will have to pay the ask rate of 8.85%.

The investor will pay 8.85% interest rate in USD and get the 5.25% interest rate in CHF. This interest can be used to pay the interest on loan

6 0

4 years ago

Your firm needs a computerized machine tool lathe which costs $53,000 and requires $12,300 in maintenance for each year of its 3

solniwko [45]

Answer:

$4,833.282

Explanation:

Calculation to determine the after-tax salvage value

First step is to calculate the remaining value after 3 years

Using this formula

Remaining value after 3 years = (Purchase price)x(1-summation of MACR rates from start to the current date)

Let plug in the formula

Remaining value after 3 years=$53,000*[(1-0.3333)-0.4445-0.1481]

Remaining value after 3 years=$53,000*$0.0741

Remaining value after 3 years=$3,927.3

Now let calculate the after-tax salvage value

After-tax salvage value=$5,300-[($5,300-$3,927.3)*0.34]

After-tax salvage value=[$5,300-($1,372.7*0.34)]

After-tax salvage value=$5,300-$466.718

After-tax salvage value=$4,833.282

Therefore The After-tax salvage value will be $4,833.282

8 0

3 years ago

The amount of increase or decrease in revenue that is expected from a particular course of action as compared with an alternativ

aalyn [17]

Answer:

a) The amount of increase or decrease in revenue that is expected from a particular course of action as compared with an alternative is termed:

Differential Revenue

b) The Differential cost of producing Product D is the additional cost of $9.25 per pound.

Explanation:

a) Differential Revenue is the difference in sales revenue that results from two different courses of action.

b) The corporate finance institute defines Differential cost as "the difference between the cost of two alternative decisions."

5 0

3 years ago

On June 15, Orange Inc. decided to retire the 2,000 shares of stock that is brought back for $100,000. If the $5 par value commo

Liono4ka [1.6K]

The journal entry to record this retirement of treasure stock would retired 2,000 shares that cost $50 per share and were originally issued at $6 per shares.

<h3>Date Account title Debit Credit</h3>

June 15 Common stock $10,000

(2000 * $5)

Additional Paid-in-capital $2,000

(2,0000 * ($6 - $5))

Retained earnings $88,000

($100,000 - $10,000 - $2,000)

Treasury stock, common $100,000

(To record this retirement of treasure stock)