Boston Company purchased land and a building in a downtown district where land values are rapidly increasing.

"The spot price of the market index is $900. A 3-month forward contract on this index is priced at $930. What is the profit or l

Mademuasel [1]

Answer:

$10 profit

Explanation:

In this question, we are asked to calculate the profit or loss to a short position.

Firstly, we identify that the spot price of market index is $900.

Now, a three months forward contract equals a value of $930.

Raising the index to $920 at the expiry date is obviously a profit to the short position.

To calculate the profit here, we simply subtract the index at expiry date from the three months forward contract.

Mathematically, this is equal to $930-$920 = $10 profit

8 0

3 years ago

Tim Urban, owner/manager of Urban's Motor Court in Key West, is considering outsourcing the daily room cleanup for his motel to

nlexa [21]

Answer:

Based on the given information related to costs for each of the options, the crossover point for Tim = 6,000 room nights (round your response to the nearest whole number). If the number of room nights is less than the crossover point, then OUTSOURCING (Duffy's Maid Service) is the best option available to Tim. Based on the given room nights that Tim expects to rent (18, 250), the best option is to keep doing the service INSOURCING (doing it himself).

Explanation:

Currently, before outsourcing, Tim's total cost = $228,125 + $61,000 = $289,125. On average, he spends $15.84247 per room.

The Duffy's Maid Service offer would represent a total cost of $337,625 + $25,000 = $362,625 for the same occupation level.

the crossover point for Tim:

12.5x + 61,000 = 18.5x + 25,000

36,000 = 6x

x = 6,000 room nights

(6,000 x 12.50) + 61,000 = (6,000 x 18.50) + 25,000 = $136,000

7 0

4 years ago

Today, you have two coins each of which is valued at $100. One coin is expected to appreciate by 5.2 percent annually while the

ziro4ka [17]

Answer:

=$337.43

Explanation:

The value of each of the coins after 50 years is the future value after 50 years at their respective interest rate.

The formula for future value is FV = PV × (1+r)n

For the first coin at 5.2 percent,

Fv = 100 x ( 1 + 5.2/100 ) 50

Fv =100 x (1+ 0.052) 50

Fv = 100 x 12. 61208795

Fv = $1,261. 21

For the second coin at 5.7 percent,

Fv = 100 x (1 + 5.7 /100)50

Fv =100 x (1 + 0.057 )50

Fv = 100 x 15.98

Fv = 1, 598. 64

the difference in value will be

=$1598.64 - $1,261.21

=$337.43

6 0

4 years ago

Every T account has two sides, credit and credit side. True False

ioda

Answer:

False

Explanation:

The two sides are DEBIT and credit.

3 0

3 years ago

________ is a financial institution owned by investors that focuses on business customers, providing bank accounts along with sp

Virty [35]

Answer:

Commercial bank.

Explanation:

A commercial bank is a financial institution that provides financial services to the public such as offering loan services, accepting deposits, foreign exchange, providing bank accounts. They encourage savings and are good sources of finance to businesses and industry.

3 0

3 years ago