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mariarad [96]
3 years ago
11

Chamonix Chateau Rentals. You are planning a ski vacation to Mt. Blanc in Chamonix, France, one year from now. You are negotiati

ng the rental of a chateau. The chateau's owner wishes to preserve his real income against both inflation and exchange rate changes, and so the present weekly rent of 9,800 (Christmas season) will be adjusted upward or downward for any change in the French cost of living between now and then. You are basing your budgeting on purchasing power parity (PPP). French inflation is expected to average 3.5% for the coming year, while US. dollar inflation is expected to be-2596.The current spot rate is $1.3620 What should you budget as the U.S. dollar cost of the 1-week rental?
a. Spot exchange rate (S/) $1.3620

b. Expected US inflation for coming year | 2.500%

c. Expected French inflation for coming year | 3.500%

d. Current chateau nominal weekly rent (E) 9,800.00
Business
1 answer:
nata0808 [166]3 years ago
7 0

Answer:

The budgeted $ amount is  $13,680.88  

Explanation:

The purchasing power parity formula gives us an idea what an exchange spot rate would be in future period using the below formula:

Future spot rate=current spot rate*(1+US inflation)/(1+French inflation)

current spot rate=$1.3620

US inflation rate is 2.50%

French inflation is 3.50%

Future spot rate=$1.3620*(1+2.5%)/(1+3.5%)

future spot rate=$1.3488

The weekly cost of vacation would also be adjusted for inflation rate in France as follows:

Adjusted price=9800*(1+3.5%)=10143

Hence the cost of the one week rental would be 10143  multiplied by the future spot exchange rate of 1.3488 i.e $ 13,680.88   (10143*1.3488)

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Crich Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct
nadezda [96]

Answer:

The correct answer is option (c) $264 underapplied

Explanation:

Given data;

Direct labour hour = 22160

Total Manufacturing overhead cost= $585,024

Actual direct labor hour = 22150

Actual Manufacturing overhead cost = $585024

Calculating the Predetermine overhead rate using the formula;

Predetermined Overhead rate=Total Overhead Cost/Total Direct Labor Hour

Predetermined Overhead rate = $585024/22160

                                                      =$26.4 per labor hour

To determine the under-applied amount of overhead cost, we use the formula;

Under−Applied amount= Estimated Overhead Cost*Actual Overhead Cost

Substituting into the formula, we have

                          (22150*26.4)-585024

      Under applied  = $ 264

                       

8 0
3 years ago
Todd Harris and Associates, a New York sales promotion agency, discovered from an analysis of its files that one-quarter (or 25
Dafna11 [192]

Answer:

The answer is: the 80/20 rule

Explanation:

Applied in business, the 80/20 rule (also called the Pareto Principle), states that 20% of your customers account for 80% of your sales. It doesn´t necessarily need to be an exact proportion of 80/20, but as a rule it should help organize our time and activities in dealing with our most important customers.

As a general rule it applies to most activities of a person´s ordinary life, were 20% of the time we spend result in 80% of the benefits.

7 0
3 years ago
Healthy foods just paid its annual dividend of $1.62 a share. the firm recently announced that all future dividends will be incr
solmaris [256]
<span>((Current value - original value) / original value) x 100 = rate of return
</span><span>(( 1.65402- 1.62) / 0.157) x 100 = Original Value
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7 0
2 years ago
attempt to avoid price competition, prefering instead to differentiate themselves by precisely targeting customer segments with
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Answer:

Specialty store

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A specialty store is a retail business that specializes in a particular range of products and its related merchandise.  A specialty store will have an extensive depth of the merchandise that its stocks. For example, a business may focus on office supplies, men clothing, or household appliances as opposed to having a wide range of consumer products.

Specialty stores will often sell their products at a premium price. They offer excellent and friendly customer service. Employees at a specialty store have in-depth knowledge about their products and will provide expert advice to customers.

5 0
3 years ago
If the fixed costs for a product decrease and the variable costs (as a percentage of sales dollars) decrease, what will be the e
il63 [147K]

Answer:

Option (b) is correct.

Explanation:

Contribution margin ratio is the difference between the selling price of the product and the variable cost of the product.

Contribution margin ratio = Selling price - Variable cost

Now, if there is a decrease in the fixed costs and variable costs of the product then as a result contribution margin ratio increases because of the fall in variable cost.

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If there is an increase in the contribution margin ration and a reduction in the fixed expense then as a result break even point decreases.

Increased; Decreased

7 0
3 years ago
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