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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.

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What is the problem associated with service quality standards such as "be nice" or "do what the customers want"?
Rama09 [41]

Answer:

b. They are not specific

Explanation:

The main problem with service quality standards such as "be nice" or "do what the customers want" is that they are not specific. An individual may think that they are being nice, while another person may take that behavior as being sarcastic or "having an attitude". The same goes for "do what the customer wants" since there are things that an employee is not allowed to do at all.

5 0
3 years ago
You own one futures contract on gold that you purchased at a quoted price of 1,448.5. The current price quote is 1,405.5. The co
Inessa [10]

Answer:

d. -$4,300.00

Explanation:

Calculation for What is your current profit or loss on this investment

Using this formula

Current profit or loss = Contract size*(Current price quote-Quoted price )

Let plug in the formula

Current profit or loss = 100 *($1,405.5-$1,448.5)

Current profit or loss = 100 *-$43

Current loss = -$4,300.00

Therefore your current loss on this investment will be -$4,300.00

6 0
2 years ago
Jensen Co. expects to pay €50,000 in one month for its imports from France. It also expects to receive €200,000 for its exports
Julli [10]

Answer:

-$5,873

Explanation:

For computation of maximum one month loss in dollars first we need to find out the net exposure and maximum one month loss in percentage which is shown below:-

Net exposure = Received amount - Paid amount

= €200,000 - €50,000

= €150,000

Maximum one - month loss in Percentage = Next month percentage - (Alpha × Euro percentage)

= 2% - (1.96 × 2.5%)

= -2.9%

Maximum one - month loss in Dollars = Net exposure × Current spot rate of the euro × Maximum one - month loss in Percentage

= €150,000 × $1.35 × (-0.029)

= -$5,873

5 0
2 years ago
Jbx automobiles, a global firm, builds factories to serve more than one country and lower the mne's production costs. jbx automo
vaieri [72.5K]
The answer to the question mentioned above is the "ECONOMIES OF SCALE". JBS automobiles, a global firm builds factories to serve more than one country and lower the MNE's production costs. JBX automobiles most likely benefit from "Economies of Scale".
3 0
3 years ago
Cosmeticon, a U.S.-based firm, has recently started exporting cosmetics to India. Cosmeticon has introduced a new range of miner
NikAS [45]

Answer:

Price skimming.

Explanation:

Price skimming is a pricing strategy in which an organization gradually lowers it's selling price after initially charging it's customers a high price in order to attract more price-sensitive customers. It is mostly used by a first-mover who faces lesser competition in business.

In this scenario, Cosmeticon had no competitors in that segment of the Indian cosmetics market, so it set a very high price for its products in order to reach the premium, price-insensitive segment of the market.

6 0
3 years ago
Read 2 more answers
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