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adoni [48]
3 years ago
5

A U.S.-based firm is planning to make an investment in Europe. The firm estimates that the project will generate cash flows of 1

00,000 euros after one year. If the one-year forward exchange rate is $1.50/euro and the dollar cost of capital is 8%, what is the present value (PV) of the project cash flows?
Business
1 answer:
pickupchik [31]3 years ago
5 0

Answer:

the present value of project cash flows is $138,888.89

Explanation:

The computation of the present value of project cash flows is shown below

Value of €100,000 in US $ in one year is

= €100,000 × $1.50

= $150,000

Now the Present value is

= Payment × (1 ÷ (1 + rate of interest)^number of years)

= $150,000 × (1 ÷ (1 + 8%)^1)

= $138,888.89

Hence, the present value of project cash flows is $138,888.89

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Cindy invests $3000 in a bond trust that pays 8% interest compounded semiannually. Her friend, Jimmy, invests $3000 in a certifi
Elanso [62]

Answer:

Cindy has more amount than Jimmy.

Explanation:

Amount invested by Cindy P = $3000

Annual rate of interest = 8%

As the amount is compounded semiannually

So rate of interest =\frac{8}{2}=4% %

Time = 20 year

So time period n = 20×2 = 40

So amount own by Cindy A=P(1+\frac{r}{100})^n

A=3000(1+\frac{4}{100})^{40}=14403.06 $

Amount deposit by jimmy P = $3000

Annual rate of interest = 7.75 %

As the amount is compounded monthly

So rate of interest r=\frac{7.75}{12}=0.322 %

Time period = 20×12 = 240

So amount own by Jimmy A=P(1+\frac{r}{100})^n

A=3000(1+\frac{0.322}{100})^{240}=6503.650 $

From the calculation we can see that Cindy has more amount than Jimmy.

4 0
3 years ago
Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production
Dmitry_Shevchenko [17]

Answer:

a

b

d

Explanation:

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Net export = exports – imports

When exports exceed import there is a trade deficit and when import exceeds import, there is a trade surplus.  

Items not included in the calculation off GDP includes:  

1. services not rendered to oneself

2. Activities not reported to the government  

3. illegal activities

4. sale or purchase of used products

5. sale or purchase of intermediate products

6.      quality of goods and services

7.    externalities

The car parts produced in the US would be added to GDP as parts of exports

3 0
3 years ago
Before contacting the news or print media about your business, what must you come up with first ?
Talja [164]

Answer:

D

Explanation:

A good story angle attracts attention

6 0
3 years ago
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Investors, when calculating the present value of a bond's future cash flows (i.e, when valuing a bond), technically use which on
Masteriza [31]

Answer:

b. yield to maturity

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The future cash flows of the bonds are discounted to the present value using the yield to maturity or market related rate of the bond. The required return of the bond represents the coupon payments that the bond is offering.

5 0
4 years ago
In a competitive industry the industry's short-run supply curve is a. The horizontal sum of the marginal cost curves b. Determin
wel

Answer:

The correct answer here is option a.

Explanation:

The industry supply curve represents the quantity of goods that all the firms in the industry will supply at a different price levels.

The short run supply curve of a firm will be that part of the marginal cost curve or MC curve which lies above the minimum point of the average variable cost curve or the AVC curve.

These supply curves of all the firms in the industry will be summed up horizontally to find the short run industry supply curve.

So, option a will be the correct answer.

4 0
4 years ago
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