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DanielleElmas [232]
4 years ago
9

The Latimore Company invested $8.5 million in a new plant in Italy when the exchange rate was 1.1500 euros to the dollar. At the

end of the year, the rate was 1.2000 euros to the dollar. (Indirect quotes.)
a. Did Latimore make or lose money on the exchange rate movement? If so, how much?

b. What kind of exchange rate gain or loss was it?

c. What was the tax impact if Latimore’s marginal tax rate is 40%?
Business
1 answer:
Maurinko [17]4 years ago
3 0

Answer:

Latinmore made money on the exchange rate movement. It was an exchange rate gain of $369,566. The marginal tax impact was $147,826.

Explanation:

Since the standard practice in accounting is to reflect the current situation of the company, any change in the exchange rate that affects the assets of the company abroad must be recognized. The financial income of exchange gains are registered in the Income Statement and affects the base to pay income tax.

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Maren received 10 NQOs (each option gives her the right to purchase 10 shares of stock for $8 per share) at the time she started
MAVERICK [17]

Answer:

$500 gain and $185 tax

Explanation:

Sale of share = No. of  NQOs × No. of shares  × Selling price per share

                      = 10 × 10 × $20

                      = $2,000

Basis = No. of  NQOs × No. of shares  × share price @$15

         = 10 × 10 × $15

         = $1,500

Gain realised = Sale of share - Basis

                      = $2,000 - $1,500

                      = $500

The tax is calculated as follows:

= Gain realised × marginal tax rate

= $500 × 37%

= $185

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4 years ago
DHL express deals with :
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Answer:

DHL express deals with:

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3 years ago
One criticism of servant leadership is question 6 options: researchers have been unable to reach a consensus on a common definit
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3 years ago
Which product is an example of a consumer good?
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The correct alternative is the letter D. Gallon of milk to use in a bowl of cereal, this being the product that is an example of a consumer good.

<h3 /><h3>What is a consumer good?</h3>

Corresponds to a product used by the final consumer, that is, individuals or families for the immediate satisfaction of a need, such as food, personal hygiene and cleaning products.

Therefore, an individual's income will always have a part destined for consumer goods, which are essential for their health and quality of life.

Find out more about consumer good here:

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8 0
2 years ago
Consider a hypothetical closed economy in which households spend $0.70 of each additional dollar they earn and save the remainin
navik [9.2K]

Answer:

(a) 0.7

(b) 3.33

(c) -$210

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(e) -$1 trillion

Explanation:

(a) Marginal propensity to consume (MPC) = 0.7

(b) Multiplier of this economy:

=\frac{1}{1-MPC}

=\frac{1}{1-0.7}

      = 3.33

(c) Decrease government purchases by $300 billion,

Initial change in consumption = Change in government purchases × MPC

                                                  = $300 × 0.7

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(e) The total change in demand resulting from the initial change in government spending is:

= Change in government purchases × Multiplier

= $300 × 3.33

= -$1 trillion

7 0
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