1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
DanielleElmas [232]
3 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]3 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.

You might be interested in
This outcome of an expansionary period would be considered negative for those living on a
Ket [755]

Answer:

fixed income

Explanation:

During the expansion business cycle, economic activities are on the increase. Key economic indicators such as employment, incomes, business earnings, demand, and supply of goods and services show positive and progressive numbers. During expansion, the GDP growth rate is healthy, and the level of investment is high.

The expansion phase brings along inflationary pressure. At the peak or near the end of the expansion cycle, the inflation rate is always above the optimal level and sometimes in double digits.  A high rate of inflation weakens the purchases power of the local currency. Employees on a fixed income will be disadvantaged. Their income will afford them fewer goods and services compared to the period before expansion.

3 0
3 years ago
Suppose that the annual rate of returns on dollar deposits equals 2% and the rate of return on euro deposits is 1%. Furthermore,
Oliga [24]

Answer:

I should invest in dollar deposits.

Explanation:

Current exchange rate is 1 euro = $1.08

Assuming I have y euro, the equivalent in dollar is $1.08y

Rate of return on dollar deposit = 2% = 0.02

Return on investment = $1.08y + (0.02 × $1.08y) = $1.08y + $0.0216y = $1.1016y

Rate of return on euro deposit = 1% = 0.01

Return on investment = y euro + (0.01 × y euro) = y euro + 0.01 y euro = 1.01y euro = 1.01y × $1.08 = $1.0908y

I should invest in dollar deposits because the return on investment is greater than euro deposits.

5 0
3 years ago
Gaming the gamers case study answers
UNO [17]
Huh? What does that mean
3 0
1 year ago
Ideally, what will the U.S. Census Bureau will help you identify? Question 4 options: The kind of population living in your neig
Nutka1998 [239]

Answer:

Option 1

Explanation:

The US Census Bureau will help you identify the kind of population living in your neighborhood.

7 0
3 years ago
When a bank requires a customer to leave a minimum balance on deposit, it is called a _______ cash balance.
d1i1m1o1n [39]

a because it means in order to avoid anything about it

3 0
3 years ago
Read 2 more answers
Other questions:
  • Janice is a 48-year-old married woman who uses technology as a major source of information and shopping. she has a dvd drive on
    12·1 answer
  • The partnership of Brandon and Ryan is being liquidated. All gains and losses are shared in a 3:1 ratio, respectively. Before li
    14·2 answers
  • Since the great recession, americans' primary _____ have been rising costs and stagnant income.
    13·1 answer
  • When evaluating services, consumers generally compare their expectations prior to the service to the outcome once the service is
    8·1 answer
  • What does the phrase high risk = High reward mean when it comes to investing?
    12·1 answer
  • Item 2 On July 1 of the current calendar year, Plum Co. paid $8,000 cash for management services to be performed over a two-year
    5·1 answer
  • Abel Corporation uses activity-based costing. The company makes two products: Product A and Product B. The annual production and
    14·1 answer
  • Landlord-Tenant relationships are established by lease contracts. State the Rights and Duties of the Landlord-Tenant Relationshi
    8·1 answer
  • What is the difference between a shortage and scarcity?.
    5·1 answer
  • The two categories of cost comprising conversion costs are
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!