Production possibilities curves are useful to businesses because they

Suppose in New York £/$ = 1, while in Tokyo ¥/$=2.5, but in London £/¥ = 0.50. (a) (2) Is there any profit that could be made wi

Dimas [21]

Answer:

(a) Yes, there is a profit by making triangular arbitrage action. Profit starting with selling ¥1,000,000 in London will be ¥250,000. Detailed description is in explanation part.

(b)

The dollar-pound exchange rate will change in the way that pound will be depreciated because there is more supply of pound in New York market following a arbitrageur action as they notice the profit-making opportunity.

Cross rates after arbitrageurs notice will be adjusted to the point where there is no arbitrage opportunity occurs. In (a) example, keeping other exchange rate unchanged, the dollar-pound exchange rate will be adjusted to £/$ = 1.25.

Explanation:

(a)

Investor sell ¥1,000,000 in London to get £500,000 ( exchange rate £/¥ = 0.50).

Further, he sells these £500,000 in New York to get $500,000 ( exchange rate £/$=2.5)

Next, they sell $500,000 to get ¥1,250,000 in Tokyo ( exchange rate ¥/$=2.5)

=> Net profit is ¥1,250,000 - ¥1,000,000 = ¥250,000

(b)

Details have already been explained in the answer part.

3 0

3 years ago

Read 2 more answers

Prior period adjustments to financial statements can result from: Multiple Choice Changes in estimates of salvage value. Materia

AveGali [126]

The answer is material math error.

An adjusting entry is essentially a bookkeeping modification that improves the accuracy of the financial statements by reflecting the revenue and spending on an accrual basis, which is typically but not always the case. At the conclusion of the accounting period, adjustments are made. This might happen towards the end of the month or at the end of the year.

Prior period adjustments are errors or mistakes committed in the prior reporting period. These mistakes must be remedied or eliminated by taking suitable corrective action. Prior period items include factual errors, arithmetic errors, and errors in applying accounting rules.

Therefore, material math error is the correct option.

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4 0

2 years ago

Americans have come a long way in reducing their overt prejudice among groups such as Hispanics, whites, blacks, Jews, and Asian

Lesechka [4]

Answer:

B.

Explanation:

Based on the information provided it can be said that people are still uncomfortable with other ethnic groups marrying into their families and living in their neighborhoods. This form of segregation still exists today in the United States of America, and mostly seems to be so because many groups prefer to live and share their space with only people from their same culture and background.

7 0

3 years ago

Harris Company uses the allowance method of handling its credit losses. It estimates credit losses at one percent of credit sale

likoan [24]

Answer:

Dec.31 Bad Debts Expense 27000

December 31 Balance Sheet Accounts Receivable 392400

Explanation:

Harris Company

Credit Sales for the current year $2700,000

Credit Losses = 1% of $ 2700,000= $ 27000

Add Allowance for Doubtful Accounts $ 30600 Cr

Required Adjustments $ 57,600 Cr

General Journal

Date Description Debit Credit

Dec.31 Bad Debts Expense 27000

Allowance for Doubtful Accounts 27000

December 31 Balance Sheet.

Accounts Receivable $450,000

Less: Allowance for Doubtful Accounts $57,600 ( 27000+ 30,600)

Accounts Receivable 392400

6 0

3 years ago

A customer has purchased 5,000 shares of ABC Corporation stock in lots of 100 shares over an extended period of time at varying

ozzi

Answer:

c. IRS rules allow the taxpayer to specify which shares being sold

Explanation:

As eahc method will make the capital gain or loss to differ the Internal Revenue Service leaves to the stockholder to decide the method

The default method is the FIFO method which states the first shares purchased are the first sale but, leaves choise to the stockhodler to use specific identification which, is what the statement correctly points out.

The method are not "required" but allowed as the stockholder see fit.

8 0

3 years ago