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larisa86 [58]
3 years ago
12

3. The USD depreciates 2% versus the JPY. The USD appreciates 1% versus the MXN. What is the approximate appreciation or depreci

ation we might see in the MXN/JPY cross exchange rate
Business
1 answer:
Doss [256]3 years ago
8 0

Answer:

The approximate appreciation or depreciation we might see in the MXN/JPY cross exchange rate is 3%.

Explanation:

The approximate appreciation or depreciation we might see in the MXN/JPY cross exchange rate can be stated using the folowing 3 steps.

Step 1. State the initial exchange rates of the currency pairs.

Let first assume the initial exchange rates are as follows:

USD1 = JPY1

USD1 = MXN1

Therefore, we have the initial cross rate as follows:

MXN1 = USD1 = JPY1

MXN1 = JPY1

Step 2. Determine the new exchange rates

The new exchange rates can be determined as follows:

When the USD depreciates 2% versus the JPY, this implies that USD1 * (100% + 2%) = USD1.02 has to be exchanged for JPY1. Therefore, we now have:

USD1.02 = JPY1, or

USD1 = JPY1/1.02

USD1 = JPY0.98

Also, when The USD appreciates 1% versus the MXN, this implies that USD1 * (100% - 1%) = USD0.99 has to be exchanged for MXN1. Therefore, we now have:

USD0.99 = MXN1, or

USD1 = MXN1/0.99

USD1 = MXN1.01

Therefore, we have the new cross rate as follows:

MXN1.01 = USD1 = JPY0.98

MXN1.01 = JPY0.98

MXN1.01 / 1.01 = JPY0.98/1.01

MXN1 = JPY0.97, or

MXN1/0.97 = JPY0.97/0.97

MXN1.03 = JPY1

Therefore, the new exchange rates are as follows:

USD1.02 = JPY1

USD0.99 = MXN1

MXN1.03 = JPY1

c. Determination of appreciation or depreciation we might see in the MXN/JPY

Percentage of depreciation of MXN against JPY = ((Initial MXN/JPY - New MXN/JPY) / Initial MXN/YPY) * 100 = ((1.03 - 1) / 1) * 100 = 3%

Since the percentage of depreciation of MXN against JPY is 3%, this also implies that the percentage of appreciation of JPY against MXN is 3%.

Therefore, the approximate appreciation or depreciation we might see in the MXN/JPY cross exchange rate is 3%.

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Answer:

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Answer:

prenuptial agreement

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No, it is not economically efficient for the dentist to buy the shield.

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No, it is not economically efficient for the radio to buy the shield.

c. Would it be economically efficient for the dentist to buy a new drill? Why or why not? By how much would total surplus change?

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Yes, it is economically efficient for the radio to buy the dentist a new drill. The Coase Theorem is an economic theory that states that economic conflicts must be solved regardless of who had the initial rights of whatever is on dispute. In this case, the dentist is causing harm to the radio, but he is doing OK. So the radio has a problem, not the dentist. The radio needs to solve its problem, so they should buy the dentist a new drill.

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Depletion Down Deep Mining Co. acquired mineral rights for $81,250,000. The mineral deposit is estimated at 65,000,000 tons. Dur
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Answer and Explanation:

The computation is shown below:

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= $1.25 × 17,550,000 tons

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c. The journal entry is shown below:

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(Being the depletion expense is recorded)

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Answer:

a.                     Strickland Company (Debtor)

Date  Account Title and Calculation                   Debit         Credit

          Notes payable                                          $202,900

          Interest payable                                        $18,600

          Accumulated depreciation (Machine)      $218,689

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                    Gain on disposition of machine                        $7,080

                     (186,000 + 397,000 - 218,680)

                    Gain on debt restructuring                                 $35,500

                    [(202,900 + 18,600) - 186,000]

                       Moran State Bank (Creditor)

Date  Account Title and Calculation          Debit         Credit

         Machine                                             $186,000

         Allowance for Doubtful accounts     $35,000

                Notes receivable                                           $202,900

                 Interest receivable                                        $18,600

b. Gain on machine disposition and the gain on debt restructuring should be reported as an ordinary gain in the income statement.

c.                      Strickland Company (Debtor)

Date  Account Title and explanation         Debit         Credit

         Notes payable                                   $202,900

         Interest payable                                 $18,600

                  Common stock                                             $112,000

                   Additional paid-in-capital                            $74,000

                   Gain on debt restructuring                          $35,500

                       Moran State Bank (Creditor)

Date  Account Title and explanation             Debit         Credit

          Investment Trading                             $186,000

           Allowance for Doubtful accounts      $35,500

                     Notes receivable                                          $202,900

                     Interest receivable                                        $18,600

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