Answer:
d. The skill level of workers is identical in both countries.
Explanation:
The Law of One Price is an economic theory which explains that the price of identical or similar goods in different markets must be the same after taking the currency exchange into consideration. In law of one price, there is perfect competition and It ensures that buyers have the same purchasing power across global markets.
Answer:
Profit earning ratio of MMC = 10%
Explanation:
Given:
Current stock price = $100
Yearly profit on each share = $10
Profit earning ratio (P\E ratio) =?
Computation of profit earning ratio:
Profit earning ratio (P\E ratio) = Current stock price / Yearly profit on each share
Profit earning ratio (P\E ratio) = $100 / $10
Profit earning ratio (P\E ratio) = 10
It is computed that MMC's Profit earning ratio is nearer to the industry averages P/E ratio so, the investor can wait for some time to purchase this stock.
Answer:
The correct option is E,Ted's annuity has a higher present value than Allison's
Explanation:
Both annuities do not have equal amount today as $1000 received today is higher in value terms than $1000 receivable in a month's time since cash receivable earlier is much more valued than the one receivable later.
Ted's annuity is an annuity due not an ordinary annuity
Allison's annuity is an ordinary annuity not annuity due
Allison's annuity has a lower present value than Ted's and not the other way round.
The only correct statement is option E,since Ted is expected to receive $1000 today, his annuity has a higher present value compared to Allison's
Answer:
$3,000 credit
Explanation:
Given the followin currency exchange rates for 1 rand are as follows:
January 1 $0.25 = 1 rand
Average for the year 0.28 = 1
December 31 0.31 = 1
Net income conversion Investment using January 1 rate = 50,000 rand × $0.25 = $12,500
Net income conversion Investment using December 31 rate = 50,000 rand × $0.31 = $15,500
Credit (Debit) = $15,500 - $12,500 =$3,000
Therefore, the translation adjustment that Yang will report at the end of the current year is $3,000 credit since the difference is positive.
