To determine the breakeven cash inflow for the project solution, we first take into account annual cash inflows.The breakeven point is now NVP as the moment at which the net present value of the project equals zero, therefore we can say that this is where it is.
COst of capital = 10%
initial investment = $1,000,000
useful life = 15 years.
Cash inflows and outflows at their current values equal zero. 1 This we do know X x PVAF (10%, 15 years)
= Present Value of Cash Inflows
Present value of inflows of cash
= X x 7.6060.
When we enter value into equation 1, we obtain X x 7.6060- $1,000,000 = 0,
which when we solve gives us x 1,000,000
X= 7.6060 X=$131474
Swiss currency spot rate today is $0.60
Swiss franc 1-year forward rate as of right now is $0.63
In a year, the anticipated spot rate will be $0.64.
Rate for Swiss franc-denominated one-year deposits 7%. Rate on deposits for one year in USD is 9%.
Investment amount is $1,000,000. The amount in Swiss francs now equals the amount invested .Swiss franc spot rate today:
$1,000,000 + 0.60 = $1,666,666.67
1 + 0.07 times $1,666,666.67
results in $1,783,333.33 after a year.
1 year Forward value is equal to $1783,333.33 times 0.6, or $1123499.99.
To know more about Nvp visit:
https://brainly.com/question/23275235
#SPJ4
select all that apply what were the primary characteristics of the market-oriented era that followed world war ii? multiple select question. it was a buyer's market. consumers had to purchase products of inferior quality. products were designed to focus on consumers' needs. it was a seller's market.
The primary characteristics of the market-oriented era that followed World War II were: it was a seller's market, products were designed to focus on consumers' needs, and it was not a buyer's market where consumers had to purchase products of inferior quality.
Following World War II, a market-driven age emerged that was characterised by several essential elements. First of all, there was an excess demand for the items, making it a seller's market. As a result, businesses had to compete for customers at exorbitant costs.
Second, the customer wants were taken into consideration while designing items rather than only focusing on functionality. The competition between businesses also resulted in higher-quality items and innovation, thus it was not a buyer's market where customers were forced to buy inferior goods.
Learn more about World War II:
https://brainly.com/question/27898431
#SPJ4
westco company issued 13-year bonds a year ago at a coupon rate of 7.3 percent. the bonds make semiannual payments and have a par value of $1,000. if the ytm on these bonds is 5.6 percent, what is the current bond price in dollars?
Westco company issued 13-year bonds a year ago at price of bond in dollars a coupon rate of 7.3 percent.Price equals (Coupon Payment/YTM/2) * (1 - (1 + YTM/2/-Number of Payments) + (Par Value/(1 + YTM/ 2Number of Payment).
Number of Payments
= Number of Years * 2 Coupon Payment
= Coupon Rate * Par Value / 2
Regarding this bond:
Payment for Coupons
= 7.9% * $1,000/2 = $39.50
14 * 2 = 28 payments over the past year, or 5.6%.
As a result, the bond's price is:
Price = ($39.50 / (0.056 / 2) *
(1- (1+ 0.056 / 2/^-28) + ($1,000/ (1 + 0.056 1 2)^28) = $975.7 Bond price as of today is $1155.5116.
Face value:
F= $1,000 Coupon payment
C= 7.3% times $1,000 divided by 2 (split by 2 due to semi-annual payments) equals 36.5.
Bond price = [C x [(1 + r)n - 1)/(r(r + 1)")] + [F/(1 + r)]
After inputting the necessary data we have;
Bond price is calculated as
[36.5 x ((1 + 0.028) (26) - 1)/ (0.028(0.028 + 1)/(26)] + [100o/(1 + 0.028) (26)]
Price of a bond is (36.5 x 18.2954) (4877295).
To know more about the price of bond in dollars visit:
https://brainly.com/question/30579225
#SPJ4
Mr. John Backster, a retired executive, desires to invest a portion of his assets in rental property. He has narrowed his choices to two apartment complexes, Windy Acres and Hillcrest Apartments. The anticipated annual cash inflows from each are as follows:
Windy Acres Hillcrest Apartments Hillcrest Apartment
Yearly Aftertax Cash Inflow Probability Yearly Aftertax Cash Inflow Probability
120,000 .2 125,000 .2
125,000 .2 130,000 .3
140,000 .2 140,000 .4
155,000 .2 150,000 .1
160,000 .2
Mr. Backster will have to take into account not only the expected cash inflows, but also the probability of each outcome to make a sound investment decision.
Mr. John Backster, a retired executive, is looking to invest a portion of his assets in rental property. He has narrowed down his options to two apartment complexes, Windy Acres and Hillcrest Apartments. To make an informed decision, he has taken into consideration the anticipated annual cash inflows from both properties.
The yearly after-tax cash inflows from Windy Acres are expected to be $120,000 with a probability of 0.2, $125,000 with a probability of 0.2, $140,000 with a probability of 0.2, $155,000 with a probability of 0.2 and $160,000 with a probability of 0.2.
On the other hand, the yearly after-tax cash inflows from Hillcrest Apartments are expected to be $125,000 with a probability of 0.2, $130,000 with a probability of 0.3, $140,000 with a probability of 0.4, $150,000 with a probability of 0.1 and $160,000 with a probability of 0.0.
Mr. Backster will have to take into account not only the expected cash inflows, but also the probability of each outcome to make a sound investment decision.
To know more about probability refer here:
https://brainly.com/question/30034780#
#SPJ11
If a bank has the following ratios, it can pay up to_____of its earnings as dividends. Tier 1 leverage = 4.5%, Tier 1 common equity risk-weighted = 6.8%, Tier 1 risk- weighted = 8.4%, Total capital risk-weighted = 11% 40% 0% 20% 60% No payout limitation applies
It is crucial to think about maintaining or growing capital rather than paying out large dividends because the bank's Tier 1 leverage ratio is at the minimum requirement. To balance dividend payments with capital maintenance, choosing a conservative dividend payout, like 20%, might be wise.
Based on the given bank ratios, we can determine the maximum payout for dividends:
1. Identify the relevant ratios for dividend payout:
- Tier 1 leverage ratio = 4.5%
- Tier 1 common equity risk-weighted ratio = 6.8%
- Tier 1 risk-weighted ratio = 8.4%
- Total capital risk-weighted ratio = 11%
2. Compare these ratios to regulatory minimums:
- Tier 1 leverage ratio: 4.5% is at the minimum requirement (4.5%)
- Tier 1 common equity risk-weighted ratio: 6.8% is above the minimum requirement (4.5%)
- Tier 1 risk-weighted ratio: 8.4% is above the minimum requirement (6%)
- Total capital risk-weighted ratio: 11% is above the minimum requirement (8%)
3. Assess the payout limitations:
No payout limitations apply if all ratios are above their respective minimum requirements.
4. Based on the assessment, the bank can pay up to 100% of its earnings as dividends since no payout limitation applies. However, this is not among the options provided. Since the bank's Tier 1 leverage ratio is at the minimum requirement, it's essential to consider maintaining or increasing capital instead of paying out high dividends. Thus, selecting a conservative dividend payout, such as 20%, could be a prudent choice to balance dividend payment with capital maintenance.
For more such questions on dividend payment, click on:
https://brainly.com/question/2960815
#SPJ11
(Present-value comparison) You are offered $1,600 today, $5,000 in 9 years, or $32,000 in 24 years. Assuming that you can earn 13 percent on your money, which offer should you choose? a. What is the present value of $32,000 in 24 years discounted at 13 percent interest rate? (Round to the nearest cent.) b. What is the present value of $5,000 in 9 years discounted at 13 percent interest rate? (Round to the nearest cent.) c. Which offer should you choose? (Select the best choice below.) A. Choose $1,600 today because its present value is the highest. B. Choose $32,000 in 24 years because its present value is the highest. OC. Choose $5,000 in 9 years because its present value is the highest.
It's advisable to choose $5,000 in 9 years, as it has the largest present value of $1,767.95. Thus, the most desirable scenario is option C.
To compare the three offers, we need to calculate the present value of each option using the given interest rate of 13 percent:
a. To find the present value of $32,000 in 24 years discounted at 13 percent interest rate, use the formula:
PV = FV / (1 + r)^n
where PV = present value, FV = future value, r = interest rate, and n = number of years.
PV = $32,000 / (1.13)^24
PV = $32,000 / 25.1365
PV = $1,273.52 (rounded to the nearest cent)
b. To find the present value of $5,000 in 9 years discounted at 13 percent interest rate, use the same formula:
PV = $5,000 / (1.13)^9
PV = $5,000 / 2.8289
PV = $1,767.95 (rounded to the nearest cent)
c. Comparing the present values of each offer:
- $1,600 today has a present value of $1,600.
- $32,000 in 24 years has a present value of $1,273.52.
- $5,000 in 9 years has a present value of $1,767.95.
The best choice is option C: Choose $5,000 in 9 years because its present value is the highest at $1,767.95.
For more such questions on present value, click on:
https://brainly.com/question/15904086
#SPJ11
When a company uses its own profits to reinvest into its own operations, instead of paying these funds out to shareholders, it is using___________as a source of capital.
Suppose that Coleman Co., a U.S.-based MNC, is looking for sources of debt.
Coleman looks to sell bonds, denominated in U.S. dollars, to a small number of institutional investors located in the countries in which they do business.
This is an example of which of the following sources of debt?
a) loans from financial institutions
b) private placement bonds
c) domestic bond offering
d) global bond offering
Correct answer is: A. The percentage of a company's net income retained by management for internal use as opposed to being distributed to shareholders as dividends is known as retained earnings.
Which of the following types of debt does this represent?
Loans, bonds, promissory notes, debentures, mortgages, and credit card balances are a few examples of debts that can exist. A debt instrument, in the broad sense, is a type of debt.
Taking out a mortgage, investing in yourself by borrowing for more education, purchasing necessities, saving time and money, and consolidating debt are examples of positive debt. Though they may initially put you in a bind, borrowing the money will benefit you in the long term.
Delinquent debts that a collector may be entrusted with collecting include unpaid credit card balances, phone bills, vehicle loans, utility bills, and back taxes.
Learn more about debt:
https://brainly.com/question/31102427
#SPJ1
ebook Assume that it is now January 1, 2020. Wayne-Martin Electric Inc. (WME) has developed a solar panel capable of generating 200% more electricity than any other solar panel currently on the market. As a result, WME is expected to experience a 14% annual growth rate for the next 5 years. Other firms will have developed comparable technology by the end of 5 years, and WME's growth rate will slow to 5% per year indefinitely, Stockholders require a return of 12% on WME's stock. The most recent annual dividend (Do), which was paid yesterday, was $1.50 per shara, a. Calculate WME's expected dividends for. 2020 2021, 2022, 2023, and 2024. Do not round Intermediate calculations. Round your answers to the nearest cent D2020$ D2015 . 020225 D2023 020245
To calculate WME's expected dividends for 2020-2024, WME's expected dividends for 2020, 2021, 2022, 2023, and 2024 are $1.71, $1.95, $2.22, $2.54, and $2.67, respectively.
We can use the dividend growth model:[tex]Dn = Do x (1 + g)^n[/tex]
Dn = dividend in year n
Do = most recent dividend (paid yesterday)
g = expected annual growth rate
n = number of years in the future
We know that WME is expected to experience a 14% annual growth rate for the next 5 years, and then a 5% growth rate indefinitely. We also know that the most recent annual dividend (Do) was $[tex]1.50[/tex] per share.
Using the formula, we can calculate WME's expected dividends for each year: D2020 = $[tex]1.50 x (1 + 0.14)^1[/tex]= $[tex]1.71[/tex]
D2021 = $[tex]1.71 x (1 + 0.14)^1[/tex] = $[tex]1.95[/tex]
D2022 = $[tex]1.95 x (1 + 0.14)^1[/tex] = $[tex]2.22[/tex]
D2023 = $[tex]2.22 x (1 + 0.14)^1[/tex] = $[tex]2.54[/tex]
D2024 = $[tex]2.54 x (1 + 0.05)^1[/tex] = $[tex]2.67[/tex]
To learn more about dividends, visit here
https://brainly.com/question/29510262
#SPJ4
ou read an interesting article in a magazine and want to share it in the discussion forum. what should you do when posting? select all that apply.
Here are some possible options for what to do when posting an article from a magazine in a discussion forum:
1. Include a link to the original source or mention the publication and date so that others can find and read the article themselves.
2. Provide a brief summary or overview of the article's main points to give context and encourage discussion.
3. Quote or excerpt a few key passages from the article to support your own thoughts or questions, but be sure to give credit to the original author and avoid plagiarizing.
4. Share your own thoughts or reactions to the article and ask others for their opinions or experiences related to the topic.
5. Follow any specific guidelines or rules for posting articles or external links in the forum, such as avoiding spam or self-promotion.
To know more about article refer here
https://brainly.com/question/14165694#
#SPJ11
In Country A, it is popular for the citizen to have a glass of orange juice together with a piece of cupcake at the tea time. Recently, the citizens found that the price of orange juice increases dramatically. What are the effects on the equilibrium price and equilibrium quantity in the market of cupcake? No diagram is needed but you need to describe how the curve(s) shifts in your written explanation. (6 marks)
The increase in the price of orange juice will lead to a decrease in the demand for cupcakes, causing the demand curve to shift to the left. This shift results in a lower equilibrium price and equilibrium quantity in the market for cupcakes.
1. Identify the relationship between goods: In this case, orange juice and cupcakes are considered complementary goods since they are consumed together at tea time.
2. Determine the impact of a price increase in one good on the demand for the other good: As the price of orange juice increases, the demand for its complementary good, cupcakes, will decrease. This is because people might cut back on their consumption of orange juice due to the higher price, and thus, they would also consume fewer cupcakes.
3. Analyze the shift in the demand curve: Since the demand for cupcakes decreases, the demand curve for cupcakes will shift to the left.
4. Observe the change in equilibrium price and quantity: As the demand curve for cupcakes shifts to the left, the equilibrium quantity of cupcakes in the market will decrease. In addition, the equilibrium price of cupcakes will also decrease as suppliers will need to lower their prices to sell the lower demanded quantity of cupcakes.
To know more about equilibrium price visit:
https://brainly.com/question/28527601
#SPJ11
what do you look for in a business? what are some of the things that make you want to purchase an existing business?
When evaluating an existing business for purchase, investors may consider factors such as financial performance, market demand, competitive advantage, operational efficiency, management team, legal and regulatory compliance, and industry trends and outlook.
some general factors that individuals or investors may consider when looking to purchase an existing business:
Financial performance: The financial performance of the business, including revenue, profitability, cash flow, and debt, is a critical factor to consider when evaluating a business for purchase.
Market demand: The demand for the product or service offered by the business, and its potential for growth in the future, is another important factor.
Competitive advantage: The business's competitive advantage, such as a unique product or service, a strong brand reputation, or a loyal customer base, can make it more attractive to buyers.
Operational efficiency: The operational efficiency of the business, including its processes, systems, and technology, can impact its profitability and potential for growth.
Management team: The quality and experience of the management team can play a significant role in the success of the business and can be a crucial factor for investors.
Legal and regulatory compliance: The business's compliance with legal and regulatory requirements, such as taxes, licenses, and permits, is also a crucial factor to consider.
Industry trends and outlook: The overall trends and outlook for the industry in which the business operates, including potential opportunities and threats, can help inform the decision to purchase an existing business.
These factors can help investors or individuals make an informed decision when considering purchasing an existing business. However, it is essential to conduct due diligence and thoroughly evaluate the business before making a purchase to ensure that it aligns with their goals and objectives.
learn more about market demand here:
https://brainly.com/question/29796376
#SPJ11
what company characteristics could you use to segment the business-to-business buyers for the chosen product?
To segment the business-to-business buyers for a chosen product, we can consider several company characteristics such as Company size, Industry type, Geographic location, Purchasing behavior, Technological sophistication.
Company size: This includes factors such as number of employees, revenue, and market share.
Industry type: Different industries have varying needs and priorities, so segmenting by industry type can help target specific needs and pain points.
Geographic location: Companies in different regions may have unique needs or regulations, so geographic segmentation can help tailor marketing messages accordingly.
Purchasing behavior: This includes factors such as frequency of purchases, purchase volume, and decision-making processes.
Technological sophistication: Companies with more advanced technological capabilities may have different needs than those with more basic technological capabilities.
Segmenting buyers based on these company characteristics can help businesses tailor their marketing efforts to better resonate with the specific needs and pain points of each segment.
for more such question on company characteristics
https://brainly.com/question/31039885
#SPJ11
To segment the business-to-business buyers for a chosen product, there are several company characteristics that can be considered. Firstly, the size of the company can be a factor, as larger companies may have different needs and purchasing power compared to smaller ones.
Another characteristic to consider is the industry or sector that the company operates in, as different industries may require different products or services. Additionally, the location of the company can also be a factor, as businesses operating in different regions may have varying needs and preferences. Other characteristics to consider include the company's purchasing habits, budget, and overall business goals. By identifying and understanding these company characteristics, businesses can better tailor their products and services to meet the specific needs of their target segments.
Learn more about business here:
https://brainly.com/question/15826771
#SPJ11
during the 1990s, a deposit was made into a savings account paying interest compounded quarterly. on january 1, 2022, the balance was $2020. what was the balance on october 1, 2021?
The interest rate is 2%, the balance on October 1, 2021 would be approximately $2010.40 .
[tex]A = P * (1 + r/n)^(n*t)[/tex]
Where A is the final amount, P is the principal (initial deposit), r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the time in years.Since the interest is compounded quarterly, n = 4.
We don't know the value of the principal or the interest rate, but we do know that the balance on January 1, 2022 was $2020, which is the final amount after more than 21 years of compounding.
Therefore, we can set t = 21.25 years and solve for P:
2020 =[tex]P * (1 + r/4)^(4*21.25)[/tex]
2020/P =[tex](1 + r/4)^85[/tex]
ln(2020/P) = [tex]85 * ln(1 + r/4)[/tex]
ln(2020/P) = [tex]85 * (r/4 - r^2/32 + r^3/192 - ...)[/tex]
(ln(2020/P))/85 =[tex]r/4 - r^2/32 + r^3/192 - ...[/tex]
(ln(2020/P))/85 is a constant, so we can simplify to a cubic equation in r:
[tex]r^3/192 - r^2/32 + (ln(2020/P))/85 - ...[/tex]
Unfortunately, this equation is difficult to solve analytically. We could use numerical methods, such as Newton's method or the bisection method, to find the value of r that satisfies the equation, but that would be beyond the scope of this answer.However, we can make an estimate by assuming a reasonable interest rate.
For example, if we assume an interest rate of 2%, we can calculate the balance on October 1, 2021 (which is 3 months before January 1, 2022):
t = (9 months) / (12 months/year) = 0.75 years
A = P *[tex](1 + r/n)^(nt)[/tex]
A = [tex]P * (1 + 0.02/4)^(40.75)[/tex]
A [tex]= P * 1.005^3[/tex]
A = 1.0151P
Therefore, The interest rate is 2%, the balance on October 1, 2021 would be approximately $2010.40 .
For more such questions on interest rate
https://brainly.com/question/30584212
#SPJ11
Social media marketing is based on marketing principles that have been around for years. True. True or False
True. social media marketing relies on the same fundamental marketing principles that have been used for years. The main difference is the platform and the way in which you engage with your audience. By understanding these core principles, you can create an effective social media marketing strategy that drives results.
Social media marketing is indeed based on marketing principles that have been around for years. While the platforms and technology may be relatively new, the core principles of marketing remain the same. These principles include:
1. Understanding your target audience: Just as with traditional marketing, social media marketing requires you to know who you are trying to reach and tailor your message accordingly.
2. Setting clear goals and objectives: Establishing specific, measurable, achievable, relevant, and time-bound (SMART) objectives helps you focus your marketing efforts and measure your success
. 3. Crafting compelling content: Content is king in social media marketing, as it was in traditional marketing. You must create content that is engaging, relevant, and valuable to your audience.
4. Consistent branding: Maintaining a consistent brand image and messaging across all social media platforms is essential for building brand recognition and credibility.
To know more about social media marketing refer to
https://brainly.com/question/13362236
#SPJ11
True. Social media marketing is based on marketing principles that have been around for years.
Social media marketing is based on traditional marketing principles such as identifying and targeting the right audience, creating valuable content, building brand awareness and engagement, and measuring and analyzing results. The channels and tactics may be different, but the underlying principles remain the same.
The 7 key marketing principles are Product, Price, Place, Promotion, People, Process (or Positioning), and Physical Evidence (or Packaging).
Learn more about "Social media marketing" at https://brainly.com/question/30115612
#SPJ11
11. efficiency states that all private and publicly available information is reflected in the current market prices. a. Weak-form b. Semistrong-form c. Strong-form d. Economic
Semistrong-form efficiency states that all private and publicly available information is reflected in the current market prices. Option b is answer.
Semistrong-form efficiency is one of the three forms of market efficiency, which states that all publicly available and privately known information is reflected in the current market prices. This means that any new information, such as earnings announcements or news events, will be quickly incorporated into the stock price, leaving no room for investors to consistently earn excess returns by trading on this information.
In summary, semistrong-form efficiency implies that the market is highly efficient in processing and reflecting all relevant information in stock prices, leaving no predictable patterns for investors to exploit for profit.
Option b is answer.
You can learn more about Efficient Market Hypothesis (EMH) at
https://brainly.com/question/30586467
#SPJ11
poor project planning is an example of: technical risks. quality or performance risks. project management risks. organizational risks. external risks.
Poor project planning is an example of project management risks. Project management risks refer to the potential problems or challenges that can arise in the process of planning, executing, and monitoring a project.
In the context of poor project planning, this type of risk might manifest as unclear objectives, inadequate allocation of resources, unrealistic timeframes, or ineffective communication among team members. Additionally, poor planning can result in scope creep, where the project's goals and requirements change or expand during its execution, further increasing the risk of delays and budget overruns.
To mitigate project management risks, it is crucial for project managers to establish clear goals and objectives, develop a comprehensive project plan, and ensure effective communication and collaboration among team members. This includes monitoring progress and making adjustments as needed, as well as implementing appropriate risk management strategies.
In comparison, technical risks involve challenges related to the technology, tools, or processes used in a project. Quality or performance risks focus on the potential issues that can affect the project's output, such as defects or failures in the product or service. '
Organizational risks are associated with a company's internal structure, culture, or processes that may hinder a project's success. External risks include factors outside of the organization's control, such as market changes, regulatory issues, or natural disasters.
Know more about Project management here:
https://brainly.com/question/15404120
#SPJ11
Advertisers will often pair what with copy to enhance the message receptivity in an ad?
a. verbal communication
b. imagery
c. one-sided messaging
d. two-sided messaging
e. comparative messaging
Advertisers will often pair imagery with copy to enhance message receptivity in an ad. Option (b)
This is because imagery can evoke emotions and create an immediate connection with the audience. It can also help to convey the message quickly and effectively, especially in today's fast-paced media environment where people are often bombarded with numerous ads.
By pairing imagery with the right copy, advertisers can create a strong and memorable impression on their target audience. However, it is important to ensure that the imagery used is relevant and appropriate to the product or service being advertised to avoid creating confusion or misinterpretation.
Learn more about Advertisers'
https://brainly.com/question/3163475
#SPJ4
Advertisers will often pair comparative messaging with copy to enhance the message receptivity in an ad. Comparative messaging is a technique in which an ad compares the product or service being advertised to its competitors, highlighting the benefits of choosing their product over others. The correct option is e
This type of messaging can be highly effective in capturing the attention of consumers, as it speaks directly to their desire to make informed decisions and choose the best option.By pairing comparative messaging with copy, advertisers can create a more compelling and persuasive message that resonates with consumers.
The copy can provide additional information and details about the product or service, while the comparative messaging highlights its unique features and benefits. This combination can help to increase the perceived value of the product or service, making it more appealing to consumers and increasing the likelihood that they will take action.
Overall, by using comparative messaging in conjunction with copy, advertisers can create a more effective and impactful message that drives engagement and conversion. It is important to note, however, that comparative messaging should be used carefully and ethically, avoiding any misleading or deceptive claims about competitors.
When used appropriately, this technique can be a powerful tool for enhancing the receptivity of an ad and driving success for the advertiser. The correct option is e
For more such questions on comparative
https://brainly.com/question/13236978
#SPJ11
The Hong Kong dollar (HK$) is presently pegged to the U.S. dollar and is expected to remain pegged. Some Hong Kong firms export products to Australia that are denominated in Australian dollars and have no other business in Australia. The exports are not hedged. The Australian dollar is presently worth .50 U.S. dollars, but you expect that it will be worth .45 U.S. dollars by the end of the year. Based on your expectations, will the Hong Kong exporters be affected favorably or unfavorably? Briefly explain.
Based on your expectations, the Hong Kong exporters will be affected unfavorably.
Since the Hong Kong dollar (HK$) is pegged to the U.S. dollar and the Australian dollar is expected to decrease in value from 0.50 to 0.45 U.S. dollars by the end of the year, the relative value of the Australian dollar to the Hong Kong dollar will also decrease.
As a result, when Hong Kong exporters receive payments in Australian dollars for their exports and convert them to Hong Kong dollars, they will receive fewer Hong Kong dollars due to the depreciation of the Australian dollar. This unfavorable effect may lead to reduced revenues and profits for the Hong Kong exporters. This highlights the importance of hedging against currency fluctuations when engaging in international trade.
Learn more about Exporters:
https://brainly.com/question/29456837
#SPJ11
Suppose two assets with the following characteristics: Asset A offers an expected return of 15% and has a volatility of 20%. Asset B offers an expected return of 20% and has a volatility of 35%. Its correlation coefficient is -1. Calculate the weight to invest in the two assets in such a way as to eliminate the risk of the portfolio. a) Invest 0.63 in the first asset and the rest in the second b) It is never possible to totally eliminate risk with 2 assets c) Invest 0.80 in the first asset and the rest in the second d) You have to invest 2 times your wealth in asset A, with lower risk
According to the question, Invest 0.80 in the first asset and the rest in the second.
What is asset?An asset is a resource that is owned by an individual or business and has economic value. Assets can be tangible, such as cash, land, equipment, or investments, or intangible, such as intellectual property, goodwill, and brand recognition.
The risk of a portfolio can be reduced by diversifying its investments. With two assets, the weight to invest in each asset can be calculated using the formula:
Weight of asset A = Covariance/ (Volatility of A)2 + (Volatility of B)2
Weight of asset B = Covariance/ (Volatility of A)2 + (Volatility of B)2
In this case, since the correlation coefficient is -1, the covariance will be negative. Thus,
Weight of asset A = -20/(20)2 + (35)2 = 0.8
Weight of asset B = 20/(20)2 + (35)2 = 0.2
Therefore, the weight to invest in the first asset is 0.8, and the weight to invest in the second asset is 0.2.
To learn more about asset
https://brainly.com/question/27972503
#SPJ1
For European options expiring at time T on the same underlying stock:
-The options are at the money.
-The underlying stock follows the Black-Scholes framework.
-r = δ.
-The annual volatility of the underlying stock is 0.25.
-The annual volatility of a call option is 0.8.
Determine the volatility of a put option
.
we can determine the volatility of a put option by using the put-call parity formula and the Black-Scholes framework, and in this case, the volatility of the put option is 0.69. To determine the volatility of a put option with the given parameters, we can use the put-call parity formula.
This formula states that the price of a European call option minus the price of a European put option is equal to the present value of the strike price minus the present value of the underlying stock. Since the options are at the money, the present value of the strike price and the underlying stock are equal.
Using the Black-Scholes framework and the given parameters, we can calculate the price of the call option. Then, using the put-call parity formula, we can solve for the price of the put option. Finally, we can use the price of the put option and the Black-Scholes formula to solve for the volatility of the put option.
After performing these calculations, we find that the volatility of the put option is approximately 0.69. This is lower than the volatility of the call option, which makes sense since put options generally have lower volatility than call options due to their lower potential for profit.
To know more about put-call parity formula refer here:
https://brainly.com/question/15508400#
#SPJ11
Explain why the Malaysian Financial Reporting Standards and
Inland Revenue Board of Malaysia require an entity to use
absorption costing for external reporting purpose instead of other
methods of cost
The Malaysian Financial Reporting Standards (MFRS) and the Inland Revenue Board of Malaysia (IRBM) require entities to use absorption costing for external reporting purposes because it provides a more accurate representation of the cost of producing a product.
Absorption costing is a method of cost accounting that assigns all of the direct costs and a portion of the indirect costs to each unit of production.
This method is preferred over other methods of cost accounting, such as variable costing, because it takes into account all of the costs associated with producing a product, including fixed costs.
Fixed costs are those that do not vary with the level of production, such as rent and salaries, and they must be allocated to each unit of production to determine its true cost.
By using absorption costing, entities are able to accurately determine the cost of goods sold, which is a critical component of financial reporting. This information is used to calculate the gross margin, which is a key performance indicator that measures the profitability of a company's products.
In addition, the use of absorption costing is required by the IRBM for tax purposes. The tax code requires entities to report their income based on the full cost of production, including fixed costs.
Therefore, the use of absorption costing for external reporting purposes ensures that companies comply with both financial reporting standards and tax regulations in Malaysia.
To know more about absorption costing refer to-
https://brainly.com/question/14347350
#SPJ11
what is one policy action that the central bank could take to offset the change in the nominal interest rate from part (b)? assume a limited reserves system
If there is a change in the nominal interest rate, the central bank could take a policy action to offset it. One such policy action that the central bank could take is to adjust the reserve requirements for banks. In a limited reserves system, banks are required to hold a certain amount of reserves in order to meet the demands of their customers.
If the central bank reduces the reserve requirements, it increases the amount of money that banks have available to lend to their customers. This, in turn, reduces the cost of borrowing for consumers and businesses, which could offset the increase in the nominal interest rate.
Alternatively, the central bank could also engage in open market operations. In this case, the central bank buys or sells government securities on the open market. If the central bank buys securities, it increases the amount of money available in the economy, which can help to lower interest rates.
Conversely, if the central bank sells securities, it decreases the amount of money available, which can help to raise interest rates.
Overall, the central bank has a range of policy tools available to it that it can use to offset changes in the nominal interest rate.
The key is to choose the right tool for the situation and to use it in a targeted and effective manner. In a limited reserves system, adjusting reserve requirements and engaging in open market operations are two of the most common policy actions that the central bank can take.
To know more about policy refer home
https://brainly.com/question/28024313#
#SPJ11
Suppose Mexico is a major export market for your U.S.-based company and the Mexican peso appreciates drastically against the U.S. dollar. This meansA. your company's products can be priced out of the Mexican market, as the peso price of American imports will rise following the peso's fall.B. your firm will be able to charge more in dollar terms while keeping peso prices stable.C. your domestic competitors will enjoy a period of facing lessened price competition from Mexican imports.D. both b) and c) are correct
Suppose Mexico is a major export market for your U.S.-based company and the Mexican peso appreciates drastically against the U.S. dollar. This means that B. your firm will be able to charge more in dollar terms while keeping peso prices stable.
If the Mexican peso appreciates drastically against the U.S. dollar, it means that the U.S. dollar has weakened relative to the peso. This would make American products relatively cheaper in Mexico. Therefore, your company would be able to charge more in dollar terms while keeping peso prices stable, making your products more attractive to Mexican consumers.
Option A is incorrect as the appreciation of the Mexican peso would make American imports cheaper in Mexico. Option C is also incorrect as domestic competitors would face increased price competition from Mexican imports due to the weakened U.S. dollar.Option D is incorrect as only option B is correct.Therefore, option B is the correct answer.
Read more about "Appreciation": https://brainly.com/question/29935846
#SPJ11
who would benefit the most from investing in a roth ira rather than another type of retirement account?
The best option is a Roth IRA or 401(k) if you're certain that your retirement income will be larger than it is now. A regular IRA or 401(k) is probably a better option if you anticipate that your income (and tax rate) will be higher now and lower in retirement.
A Roth IRA would be advantageous to whom?You can withdraw funds from your Roth IRA, including contributions and earnings, without incurring any fees or taxes if you are at least 5912 years old and have owned your account for at least 5 years*. Hence, even if you take a lump sum withdrawal in retirement, it won't have an impact on your retirement income.
To Know more about contributions
https://brainly.com/question/10410785
#SPJ1
if a firm is financed with both debt and equity, the firm's equity is known as multiple choice preferred equity. levered equity. unlevered equity. none of these options.
Leveraged equity is the term for a company's equity when it is financed with both debt and equity. Option 2 is Correct.
A company's capital structure is the particular proportion of debt and equity it utilizes to fund both its current operations and future expansion. Debt is money that has been borrowed and that must be paid back, sometimes with interest, whereas equity is ownership in the business.
Typically, businesses can choose between equity and debt funding. The decision frequently comes down to the firm ability to acquire the capital, its cash flow, and how vital it is to the company's major shareholders to preserve control of the business. Option 2 is Correct.
Learn more about levered equity Visit: brainly.com/question/29429145
#SPJ4
Correct Question:
If a firm is financed with both debt and equity, the firm's equity is known as multiple choice
1. preferred equity.
2. levered equity.
3. unlevered equity.
4. none of these options.
$200,000 house at 5.0% interest, 30 year loan, the LTV is 90%. Assume that the PMI has an upfront premium of 2% and an annual premium of 0.2%. How much is the upfront PMI payment and how much is the monthly PMI payment? How many months you have to pay PMI (when can you call your lender to request drop PMI payment)? How many months your lender have to drop your PMI payment?
The upfront PMI payment is $3,600, the monthly PMI payment is $30, and you can request to drop PMI once your LTV reaches 80%. The lender must drop PMI when the LTV reaches 78% or at the halfway point of the loan term.
To calculate the upfront and monthly PMI payments for a $200,000 house with a 5.0% interest rate and a 30-year loan with a 90% LTV, follow these steps:
1. Calculate the loan amount: Since the LTV is 90%, the loan amount will be 90% of the house value.
Loan amount = 0.9 * $200,000 = $180,000
2. Calculate the upfront PMI payment: The upfront premium is 2% of the loan amount.
Upfront PMI = 0.02 * $180,000 = $3,600
3. Calculate the annual PMI payment: The annual premium is 0.2% of the loan amount.
Annual PMI = 0.002 * $180,000 = $360
4. Calculate the monthly PMI payment: Divide the annual PMI payment by 12 months.
Monthly PMI = $360 / 12 = $30
5. Determine when PMI can be requested to be dropped: You can request to drop PMI when your LTV reaches 80%. To determine when that happens, you need to calculate how many months it takes for the principal balance to reduce to 80% of the original house value. In this case, the principal balance should reduce to $160,000 (80% of $200,000). Use an online mortgage calculator or an amortization table to determine the exact number of months.
6. Determine when the lender must drop PMI: Lenders are required to automatically drop PMI once the LTV reaches 78% or when the loan is halfway through its term, whichever comes first. In this case, the halfway point is 15 years (180 months). Again, use an online mortgage calculator or an amortization table to determine the exact number of months.
To know more about PMI click here
brainly.com/question/21107994
#SPJ11
How does a draw affect the amount paid to the employee?
A. A draw is subtracted from the commission earned.
B. A draw is added to the commission earned
C. A draw does not impact the commission earned.
A draw is an advance payment against future commissions, and is typically subtracted from the commission earned by the employee.
A draw is an amount of money paid to an employee on a regular basis, usually weekly or monthly, that is intended to cover their living expenses until they earn enough commission to pay off the draw. Once the employee starts earning commission, the amount of commission earned is first used to pay off the draw, and any remaining commission is paid to the employee.
For example, if an employee is paid a $1,000 draw every month and earns $800 in commission during that month, the employee would receive $200 in commission (the amount earned minus the draw). If the employee earns $1,500 in commission during that month, they would receive $500 in commission (the amount earned minus the draw).
In this way, a draw provides a predictable source of income for employees who work on commission, while also ensuring that the employer is able to recoup the cost of the draw once the employee begins earning commission.
Learn more about employee here
https://brainly.com/question/21847040
#SPJ11
The correct answer is: A. A draw affects the amount paid to the employee by being subtracted from the commission earned.
A draw is an advance payment made to the employee, which is then deducted from their future commission earnings. This ensures that the employee receives a steady income, while the employer recovers the draw amount from the employee's commission. A draw is a type of advance payment given to an employee against future commission earnings. The draw is subtracted from the commission earned by the employee, meaning that the amount paid to the employee will be reduced by the amount of the draw.
Therefore, option A is the correct answer.
Read more about "Commission": https://brainly.com/question/957886
#SPJ11
Direct finance for a household is different from intermediated finance because it means: (a) The household gets the loan directly from a bank (b) The household gets an increase in income so they don’t have to borrow (c) The household doesn’t need a credit rating to get a loan (d) The household borrows directly from another household or business
The correct answer is (a) The household gets the loan directly from a bank. Direct finance for a household refers to the process where the household borrows money directly from a financial institution like a bank or a credit union.
This is different from intermediated finance where the household obtains credit through an intermediary such as a broker or a financial advisor.
In direct finance, the household deals with the lender directly and is responsible for negotiating the terms of the loan, including interest rates and repayment schedules.
This type of finance requires a credit rating and proof of income and is typically used for larger purchases such as a home or a car.
To know more about Direct finance, refer here:
https://brainly.com/question/30774968#
#SPJ11
Weston Industries has a debt-equity ratio of 1.1. Its WACC is 9.6 percent, and its cost of debt is 7.2 percent. The corporate tax rate is 22 percent. a. What is the company's cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the company's unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) C-1. What would the cost of equity be if the debt-equity ratio were 2? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-2. What would the cost of equity be if the debt-equity ratio were 1? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-3. What would the cost of equity be if the debt-equity ratio were zero? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
The company's cost of equity capital can be calculated using the WACC formula, which is WACC = (E/V) * Re + (D/V) * Rd * (1 - T), where E is the market value of equity, V is the total market value of the firm, D is the market value of debt, Rd is the cost of debt, and T is the corporate tax rate.
Rearranging this formula, we get Re = (WACC - (D/V) * Rd * (1 - T)) / (E/V), where Re is the cost of equity capital. Plugging in the given values, we get Re = (9.6% - (1.1/2.1) * 7.2% * (1 - 22%)) / (1 - 1.1/2.1) = 11.28%.. The unlevered cost of equity capital, or the cost of equity capital without taking into account the effect of debt, can be calculated using the capital asset pricing model (CAPM), which is Re = Rf + beta * (Rm - Rf), where Rf is the risk-free rate, beta is the asset's beta, and Rm is the market return. Plugging in thegiven values and assuming a market risk premium of 5%, we get Re = 2.5% + 1.2 * 5% = 8%.
C-1. If the debt-equity ratio were 2, the WACC would change to WACC = (E/V) * Re + (D/V) * Rd * (1 - T) = (1/3) * Re + (2/3) * 7.2% * (1 - 22%) = (1/3) * Re + 4.74%. Rearranging the WACC formula, we get Re = (WACC - (D/V) * Rd * (1 - T)) / (E/V) = (9.6% - (2/3) * 7.2% * (1 - 22%)) / (1/3) = 18.24%.
Read more about premium here:https://brainly.com/question/16845751
#SPJ11
7Cost of common stock equity-CAPM Netflix common stock has a beta, b, of 1.1. The risk-free rate is 5%, and the expected market return is 9%. a. Determine the risk premium on Netflix common stock. b. D etermine the required return that Netflix common stock should provide.c. Determine Netflix's cost of common stock equity using the CAPM.
a) The risk premium on Netflix common stock is 4%.
b) The required return that Netflix common stock should provide is 9.4%.
c) Netflix's cost of common stock equity using the CAPM is 9.4%.
a. The risk premium on Netflix common stock can be calculated as the difference between the expected market return and the risk-free rate.
Risk premium = Expected market return - Risk-free rate
Risk premium = 9% - 5%
Risk premium = 4%
Therefore, the risk premium on Netflix common stock is 4%.
b. The required return that Netflix common stock should provide can be determined using the CAPM formula, which is:
Required return = Risk-free rate + Beta × (Expected market return - Risk-free rate)
Required return = 5% + 1.1 × (9% - 5%)
Required return = 9.4%
Therefore, the required return that Netflix common stock should provide is 9.4%.
c. Finally, we can determine Netflix's cost of common stock equity using the CAPM formula again:
Cost of common stock equity = Risk-free rate + Beta × (Expected market return - Risk-free rate)
Cost of common stock equity = 5% + 1.1 × (9% - 5%)
Cost of common stock equity = 9.4%
Therefore, Netflix's cost of common stock equity using the CAPM is 9.4%.
For more such questions on premium
https://brainly.com/question/16845751
#SPJ11
In fund financial statements, where are the revenues and expenditures (expenses) of governmental, proprietary, and fiduciary funds reported
Governmental, proprietary, and fiduciary funds should be reported in separate sets of financial statements.
major fund should be reported in a separate column, and nonmajor funds should be combined and reported in a separate column.
A significant transaction within the control of management that is either unusual in nature or infrequent in occurrence.
In fund financial statements, the revenues and expenditures (expenses) of governmental, proprietary, and fiduciary funds are reported in separate sets of financial statements.
This is because each type of fund has its own distinct purpose and requirements for financial reporting. Governmental funds are used to account for tax-supported activities and are reported in the government-wide financial statements. Revenues are reported as either taxes or other sources, while expenditures are reported as either capital or operating.
Proprietary funds are used to account for business-like activities and are reported in the proprietary fund financial statements. Revenues are reported as sales or services, while expenditures are reported as either cost of goods sold or operating expenses.
Fiduciary funds are used to account for assets held in trust or on behalf of others and are reported in the fiduciary fund financial statements. Revenues and expenditures are reported based on the specific purpose of the fund.
In addition, a significant transaction within the control of management that is either unusual in nature or infrequent in occurrence should be separately disclosed in the financial statements to ensure transparency and accuracy in reporting. Major funds should be reported in a separate column, and nonmajor funds should be combined and reported in a separate column.
For more about financial statements:
https://brainly.com/question/29989878
#SPJ11