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3 years ago

4. Which of the following situations typically would result from an appreciating U.S. dollar relative to the

Business

1 answer:

patriot [66]3 years ago

5 0

Answer:

D. Americans purchase more Canadian made products.

Explanation:

The situation that would typically result from an appreciating U.S. dollar relative to the Canadian dollar is "Americans purchase more Canadian made products."

When Americans purchase more Canadian-made products, the Canadian dollar will rise or appreciate against the U.S. dollar. This is based on the principle of trade balance, whereby the monetary value of a country's imports and exports are evaluated over a given period.

In this case, the monetary value of Canadian exports against the U.S. dollar will indicate a positive trade surplus, hence, the Canadian dollar or currency will appreciate against the U.S. dollar.

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Firm X and Firm Y both sell the same products at the same price; both firms are the same size with identical sales levels; Firm

Vika [28.1K]

Answer:

The options are given below:

A. Firm X

B. Firm Y

C. Same variability of operating profits

D. It would depend on tax effect on taxable income

The correct option is B. Firm Y

Explanation:

This is because firm Y has a higher operating leverage than firm X.

<u>Operating Leverage</u> refers to a cost-accounting formula that measures the degree to which a firm can increase operating income by increasing revenue. Operating leverage actually boils down to the analysis of fixed costs and variable costs, and it is highest in companies that have a high fixed operating costs in comparison with variable operating costs. What this means is that this kind of company makes use of more fixed assets. On the other hand, operating leverage is lowest in companies that have a low fixed operating costs when compared with variable operating costs.

Companies with high operating leverage are capable of making more money from each additional sale if they do not have to incur more costs to produce more sales.

Therefore, from the scenario given above, we can conclude that firm Y has a higher operating leverage than firm X, because firm X has lower fixed costs than firm Y, and a higher variable cost than firm Y as well. Hence, firm Y has the potential to make more operating profits from its business activities.

4 0

3 years ago

What is the expected cashflow of the company XYZ in year 1 if its EBIT in year 1 is $270,000, depreciation is $85,000, change in

vitfil [10]

Answer: b. 233,500

Explanation:

The expected cashflow is;

= (EBIT * (1 - tax) ) + Depreciation - change in net working capital - capital expenditure

= (270,000 * (1 - 25%)) + 85,000 - 19,000 - 35,000

= $‭233,500‬

3 0

3 years ago

If the maker of a note does not pay at maturity, __________.

ira [324]

The maker. Hope this helps. :)

3 0

3 years ago

Indy Company has the following data for one of its manufacturing plants:

mel-nik [20]

Answer:

1. Processing time:

Processing time = Theoretical time

Processing time is there for 6 minutes

Non processing time = Actual cycle time - processing time

= 7.35 - 6

= 1.35 minutes

2. Manufacturing Cycle Efficiency (MCE):

= Processing time / Actual cycle time

= 6 / 7.35

= 81.6%

3 0

3 years ago

A capital budgeting project is expected to have the following cash flows: Year Cash Flows 0 -$850,000 1 $300,000 2 $400,000 3 $5

diamong [38]

The capital budgeting project's net present value at an 18% required rate of return is <u>($4,200).</u>

<h3>What is the net present value?</h3>

The net present value represents the net discounted value of cash inflows after subtracting the present value of cash outflows.

The net present value can be determined by determining the present values of cash inflows and outflows and netting the two values.

<h3>Data and Calculations:</h3>

Required rate of return = 18%

Project period = 3 years

Year Cash Flows PV Factor Present Value

0 -$850,000 1 -$850,000 ($850,000 x 1)

1 $300,000 0.847 $254,100 ($300,000 x 0.847)

2 $400,000 0.718 $287,200 ($400,000 x 0.718)

3 $500,000 0.609 $304,500 ($500,000 x 0.609)

Net present value ($4,200)

Thus, the capital budgeting project's net present value at an 18% required rate of return is <u>($4,200)</u>.

Learn more about the net present value at brainly.com/question/13228231

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8 0

2 years ago