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3 years ago

Interest rates and decisions

Business

1 answer:

svetoff [14.1K]3 years ago

4 0

Answer:

a. No, the firm needs to take the volatility of short-term rates into account.

Explanation:

Short term interest rates are more volatile than the long term interest rates. If the company chooses to finance its operations solely from short term financing than it will need to incorporate the affect of volatility in the short term interest rates to identify the net returns. The volatility should be calculated with the risk factor and required rate of return of the funds.

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The Pastel Paint Company recently loaned $300,000 to KIX 96, a local radio station. The radio station signed a noninterest-beari

VladimirAG [237]

Answer:

Following are the queries to these question:

Explanation:

Reporting entering for recording the note received

Permissible notes (face amount)........................................................ $\$300,000$

Cash................................................................................................... $\$300,000$

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3 years ago

Jaguar has full manufacturing costs of their Sminustype sedan of pound22,803. They sell the Sminustype in the UK with a 20% ma

Anika [276]

Answer:

Explanation:

Old Price 27363

Exchange Rate 2.01

USD Value 55000

the company has committed to sale at $55000 existing price for next six months.

No currency hedge contract has been made by jaguar, in such case due to appreciation of pound the value of dollar will decrease but due to commitment by jaguar not to fluctuate the cost the total amount receivable in pounds will decrease as compared to 6 months before

USD Value 55000

Exchange Rate 2.15

Price in Pounds 25581

Decrease in pounds = 27363-25581 = 1782 loss

3 0

3 years ago

Read 2 more answers

Meatpackers, Inc., enters into a contract with Nevada Ranch for the delivery of a certain number of beef cattle on a set schedul

frez [133]

Answer:

Provide the buyer with funds for a foreseeable loss beyond the contract

Explanation:

Consequential damages in contracts is different from incidental or actual damages because it causes a loss that impacts the business of the other party beyond the contract horizon, when the opposite party fails to fulfill his side of the contractual obligations.

In the scenario, Nevada's failure to deliver within agreed contractual timing is not just delaying the time of Meatpackers but as a consequence, is also causing them loss in money terms which will impact their business beyond the contract horizon.

Hence an award of consequential damages to Meatpackers will provide the buyer with funds for a foreseeable loss beyond the contract.

6 0

3 years ago

Read 2 more answers

Which is most likely to result from a layoff of factory workers in a town?

Soloha48 [4]

<span>The most likely result from a layoff of factory workers in a town is that the unemployment rate will rise, at least temporarily. This is assuming the factory is in the US and all workers are full time. Other government services might also see an increase, such as food stamps, job training services, etc.</span>

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3 years ago

A firm is evaluating a capital budgeting project that generates cash inflows equal to $50 per year for the next five years. If t

Anna11 [10]

Answer:

Initial Cost = $180

Explanation:

Payback period estimates the time an investment projects resulting cash flows take to recover the initial amount o=invested in the project. A traditional payback period doesnot take present value into account and just focuses on the nominal recovery of the initial investment.

If a capital budgeting project provides inflows of $50 per year and the payback period is 3.6 years, the initial investment is:

3.6 = 50 + 50 + 50 + x

Where x = 0.6 of 50

and x = 0.6 * 50 = 30

Initial cost = 50 + 50 + 50 + 30 = $180

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3 years ago