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3 years ago

What would be the real rates of return on the same deposit if there was a simultaneous 10% increase in all dollar prices

Business

1 answer:

VMariaS [17]3 years ago

4 0

Answer:

Full question is<em> </em><em>'1. Calculate the dollar rates of return from a £10,000 deposit in a London bank in a year when the interest rate on pounds is 10 percent and the $/£ exchange rate moves from $1.50/£ to $1.38/£. 2. What would be the real rates of return on the same deposit if there was a simultaneous 10% increase in all dollar prices?"</em>

1. In current period, Dollar price of deposit = £10,000 x ($1.50/£) = $15,000

After 1 year, Pound interest = £10,000 x 10% = £1,000

After 1 year, Pound value of (Deposit + Interest) = £(10,000 + 1,000) = £11,000

After 1 year, Dollar value of (D+I) = £11,000 x ($1.38/£) = $15,180

After one year, Dollar rate of return = ($15,180/$15,000) - 1

After 1 year, Dollar rate of return = 1.012 - 1

After 1 year, Dollar rate of return = 0.012

After 1 year, Dollar rate of return = 1.2%

2. As calculated above, After 1 year, Nominal Dollar rate of return = 1.2%

Note: After 1 year, Real Dollar rate of return = Nominal Dollar rate of return - Inflation Rate

Real Dollar rate of return = 1.2% - 10%

Real Dollar rate of return = -8.8%

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<h3>What is monetary and fiscal policy?</h3>

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Expansionary fiscal policy is when the government increases the money supply in the economy either by increasing spending or cutting taxes. Contractionary fiscal policies is when the government reduces the money supply in the economy either by reducing spending or increasing taxes

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2 years ago

The figure in the amount column is sometimes referred to as 'cumulative balance'. Why is it referred to in this way?

Bas_tet [7]

Answer:

Explanation:

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3 years ago

Sharp Company manufactures a product for which the following standards have been set:

topjm [15]

Answer:

See attached file pls

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3 years ago

"Uber’s first challenge is managing for competitive advantage. What function of management is most closely related to setting go

mihalych1998 [28]

Answer: Planning function of management

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3 years ago

Gundy Company expects to produce 1,243,200 units of Product XX in 2020. Monthly production is expected to range from 79,000 to 1

a_sh-v [17]

Answer:

Gundy Company

Flexible Budget Report for the month of March, 2020:

Flexible Budget Actual Budget Variance

Direct materials $400,000 $425,000 $25,000 U

Direct labor $700,000 $695,000 $5,000 F

Overhead $1,000,000 $1,005,000 $5,000 U

Fixed Cost $632,000 $632,000 $0 None

Explanation:

a) Data and Calculations:

Expected production units for 2020 = 1,243,200

Monthly production range = 79,000 to 121,000

Budgeted variable manufacturing costs per unit are:

Direct materials $4

Direct labor $7

Overhead $10

Total variable cost $21

Budgeted fixed manufacturing costs per unit:

Depreciation $5

Supervision $3 $8

Total costs $29

Total fixed cost = 79,000 * $8 = $632,000

Actual costs incurred in March 2020:

Production units = 100,000

Direct materials = $425,000 ($4.25 per unit)

Direct labor = $695,000 ($6.95 per unit)

Variable overhead = $1,005,000 ($10.05 per unit)

Actual fixed costs = $632,000

Flexible Budget:

Direct materials $400,000 ($4 * 100,000)

Direct labor $700,000 ($7 * 100,000)

Overhead $1,000,000 ($10 * 100,000)

Fixed Cost $632,000

4 0

3 years ago