A European investor can earn a 4.75 percent annual interest rate in Europe or 2.75 percent per year in the United States. If the spot exchange rate is $1.58 per euro, at what one-year forward rate would an investor be indifferent between the U.S. and European investments?

Answers

Answer 1

Answer:

To obtain the same returns, the interest rate in the United States should be 7.5%.

Explanation:

Since $ 1.58 dollars is equal to $ 1 euro, the difference between both currencies arises from the following calculation:

1 = 100

1.58 = X

((1.58 x 100) / 1) = X

158/1 = X

158 = X

Therefore, a euro is worth 58% more than a dollar is worth.

Thus, if the investment in Europe has an interest rate of 4.75%, to obtain the same return in dollars, an interest rate of 58% must be obtained, that is:

4.75 x 1.58 = X

7.5 = X

Thus, to obtain the same returns, the interest rate in dollars should be 7.5%.


Related Questions

Cost of goods manufactured for Branson Books for the year was $860,000. Beginning work-in-process inventory was $40,000. Ending work-in-process was $60,000. If the beginning finished goods inventory was $400,000 and the ending finished goods inventory was $990,000.

Required:
What was the cost of goods sold for the year?

Answers

Answer:

Cost of goods sold = $270,000

Explanation:

Given:

Cost of goods manufactured = $860,000

Beginning work-in-process = $40,000

Ending work-in-process = $60,000

Beginning finished goods = $400,000

Ending finished goods inventory = $990,000

Computation:

Cost of goods sold = Cost of goods manufactured + Beginning finished goods - Ending finished goods inventory

Cost of goods sold = $860,000 + $400,000 - $990,000

Cost of goods sold = $270,000

The cost of goods sold for Branson Books in this year is $270,000.

Here, we are going to prepare the amount of the cost of goods sold for Branson Books.

Given Information

Cost of goods manufactured = $860,000

Beginning work-in-process = $40,000

Ending work-in-process = $60,000

Beginning finished goods = $400,000

Ending finished goods inventory = $990,000

The formula for Cost of goods sold is {Cost of goods manufactured + Beginning finished goods - Ending finished goods inventory}

Cost of goods sold = $860,000 + $400,000 - $990,000

Cost of goods sold = $270,000.

Therefore, the amount of the cost of goods sold for Branson Books is $270,000.

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First National Bank charges 14.1 percent compounded monthly on its business loans. First United Bank charges 14.4 percent compounded semiannually. Calculate the EAR for First National Bank and First United Bank.

Answers

Answer:

16.7

Explanation:

Issuing a $1,000 par value bond with a yield to maturity of 10%. The company is in a 35 percent marginal tax bracket. What will be the firm’s after-tax cost of debt on the bond?

Answers

Answer:

6.50%

Explanation:

The after-tax cost of the debt is the yield to maturity after having deducted the tax shield which is computed using the formula below:

after-tax cost of debt=pretax cost of debt*(1-tax rate)

pretax cost of debt=yield to maturity=10%

tax rate=35%

The after-tax cost of debt=10%*(1-35%)

The after-tax cost of debt=10%*65%

The after-tax cost of debt=6.50%

Discuss the four common types of constraints (time, labor, equipment, and facilities) facing service businesses and give an example of each (real or hypothetical).

Answers

Answer:

The most severe constraint that anyone faces is time, the day has 24 hours, a week has 7 days and the year has 365 days. No matter how big or small a company is, time is the same for all. E.g. a factory has to build 10,000 units of good X for next week, they must do it before the due date. If the factory is shut down for any reason at all, e.g. lights go out, they will have to work overtime.

Two of the other constraints are basically related to capital: equipment and facilities. No matter how rich a person is or how big a company is, they have a certain amount of money, they cannot own it all. Only governments own machines that print money, and even they face strict regulations regarding how much money they can print. You need money to buy more equipment and build larger facilities, or if you do not have enough money, you will have to work overtime or eventually not be able to produce the output that you wanted. A facility has a certain level of maximum production, the same for a machine or equipment, and you cannot make it work over that level. E.g. a machine produces 10 units per hour, so it will not be able to produce 100 units per hour, nor 20 nor 40, not even 11.

Labor constraints refer to the total amount of labor supply available. E.g. all you need to do to understand the shortage of certain qualified labor is look at the amount of job vacancies in the high tech, computer and software industries. There are hundreds of thousands of vacant jobs around the world which cannot be filled simply because there are not enough qualified people. That is also the reason why careers in these industries are paid higher than average wages.

A firm have an inventory turnover of 5 times a year on a cost of goods sold of $800 000.if the firm improves the inventory turnover to 8 times a year while the cost of goods sold remains the same, which of the following statement is true?
A)$100,000 is additionally invested in purchasing stock
b)$160,000 is released into working capital
c)$60,000 is additionally invested in purchasing stock
d)$60,000 is released into working capital

Answers

Answer:

d) $60,000 is released into working capital

Explanation:

Inventory turnover is the number of times that a firm buys and sells inventory. A high inventory means that the company sells its stock many times in a year.

the formula for inventory turnover ratio

=Cost of goods sold/ average inventory

If a firm has COGS of $800,000 and an inventory turnover of 5, then the average inventory will be

=$800,000 /5

=$160,000

If the firm improves its  turnover to 8, then the average inventory will be

=$800,000/8

=$100,000

The firm average inventory will  $100,000 as opposed to $160,000 previously.

$60,000  will be released to working capital.

Ratios are used in financial analysis because:

a. different companies use different accounting methods.
b. raw data is difficult to evaluate across time and companies.
c. ratios are complex analysis tools.

Answers

Answer:

b. raw data is difficult to evaluate across time and companies.

Explanation:

There are various ratio that company determines like liquidity ratios, solvency ratios, etc

It helps the company to analyze its financial position, performance and profitability so that the company is able to take the goods decisions that help the company to accomplish its goals and objectives

Now as per the given option, the option b is correct as the raw data is difficult to analyze and evaluate between the time period and the companies

Therefore the correct option is b.

the best answer for the question . the population of a small island nation is 50,000 people and their real GDP is $ 500,000,000 , then what's the real GDP per capita

Answers

I am not sure what the questions is can you explain it more
Please

1. Which one of the following is considered a consumer fraud scheme?

a. Bait and switch.

b. Bait and catch.

c. Advertising.

d. Spam emails.


PLEASE ANSWER AS SOON AS POSSIBLE

Answers

Bait and switch is a “sales tactic that lures customers in with specific claims about the quality or low prices on items that turn out to be unavailable in order to upsell them on a similar, pricier item. It is considered a form of retail sales fraud.”

So I would go with A.

You are a beginning investor with only $5,000 in savings. How can you achieve a widely diversified portfolio at reasonable cost

Answers

Buy shares in a mutual fund. Mutual funds pool savings from many individual investors and then
invest in a diversified portfolio of securities. Each individual investor then owns a proportionate
share of the mutual fund's portfolio.

On February 22, Brett Corporation acquired 210 shares of its $3 par value common stock for $25 each. On March 15, the company resold 62 shares for $28 each. What is true of the entry for reselling the shares

Answers

Answer:

Credit Additional Paid in Capital $186

Explanation:

Preparation of the true of the Journal entry for reselling the shares

Dr Cash 1,736

(62 x $28)

Cr Treasury Stock 1,550

(62x $25)

Cr Additional Paid-in Capital 186

(62 x $3)

Therefore the journal entry to reissue the shares for Brett Corporation On February 22 would be:

Credit Additional Paid in Capital $186

The increased generosity of unemployment insurance programs in Canada as compared to the United States should:_____

a. increase the duration of unemployment in Canada as compared to the U.S.
b. decrease the duration of unemployment in Canada as compared to the U.S
c. raise the duration of unemployment in the U.S.
d. have no impact on the duration of unemployment in Canada.

Answers

Answer:

Option A: Increase the duration of unemployment in Canada as compared to the U.S

Explanation:

Unemployment is simply defined as the total number of people who are actively looking for work but do not currently have job (employed).

Unemployment insurance is a federally authorized, state-run program in which payroll taxes are used to pay benefits to workers laid off by companies.

William's accountant made an error, and the budget has been reduced from $3000 to $2500. William's profit will go down by:________

a. $625
b. $1350
c. $1650
d. $0

Answers

His profit will go down to A

What term describes a ban or restriction on trade with another country?

Answers

Answer:

Embargo is the term which is used to describe the ban or restriction on trade with another country. Explanation: Embargo is an official suspension of trade with other countries. Under this act there is a restriction of import and export of products between the countries due to specific reason.

The term that describes a ban or restriction on trade with another country is called embargo.

What is embargo?

Embargo refers to an official ban on trade or other commercial activity with particular in the country. It is an official suspension of trade with other countries.

Under this act(embargo), there is a restriction of import and export of products between the countries due to specific reason.

Embargo can be placed on

Specific categories of goods.Scientific and technical information.Transport and other services,

Therefore, embargo is the term that describes a ban or restriction on trade with another country.

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Patrick took a loan of $50,000 with a repayment period of five years from a bank to start his own business. Every month he has to pay the bank $900 to repay the loan. What type of credit is demonstrated in this scenario? A. unsecured credit B. secured credit C. revolving credit D. installment credit

Answers

Answer:

b

Explanation:

Answer:

D. Installment Credit

Lux Company uses a periodic inventory system. The company started the month with 20 lamps in its beginning inventory that cost $30 each. During the month, Lux purchased 80 additional lamps for $31 each. At the end of the month, Lux counted its inventory and found that 25 lamps remained unsold. If Lux uses the weighted average cost method, its cost of goods sold for the month is:________

Answers

Answer:

cost of goods sold = $2,310

Explanation:

beginning inventory 20 units at $30 each = $600

purchases during the month = 80 units at $31 each = $2,480

ending inventory = 25 units

using the weighted average cost method, each unit will be valued at ($600 + $2,480) / (20 + 80) = $3,080 / 100 units = $30.80

ending inventory = 25 units x $30.80 = $770

cost of goods sold = (100 - 25) x $30.80 = $2,310

1. When has your level of performance been directly affected by your motivation?

Answers

Answer:

Softball

Explanation:

I hate doing softball now so i dont preform as well

Motivation is important to a business and its employees. It helps an individual achieve personal goals. A motivated individual will have greater job satisfaction, heightened performance and a willingness to succeed. This is enjoyed by the wider team and the overall organization.

Chester's Balance Sheet has $57,976,422 in equity. Further, the company is expecting $3,000,000 in net income next year. Assuming no dividends are paid and no stock is issued, what would their Book Value be next year

Answers

Answer:

Chester's Book Value would be $60,976,422 next year.

Explanation:

a) Data and Calculations:

Equity = $57,976,422

Expected net income = $3,000,000

If no dividends are paid and no stock is issued, the expected net income will be equal to the Retained Earnings for the next period.

Therefore, the book value or equity value of Chester's balance sheet for the next year will be the addition of the net income of $3,000,000 to the equity balance of $57,976,422.

This will total $60,976,422 ($57,976,422 + $3,000,000).

b) Chester's book value is the net asset value and can be calculated as total assets minus liabilities.

Joe owns a business renting out properties as apartments. He is hoping to purchase an old building to create new apartment homes. Before Joe is able to purchase the building, he must work out a deal with the current owner, who has decided to sell the property. Use the drop-down menu to complete each statement. Based on the information in the passage, it is most likely that Joe lives in a economy. The building that Joe is interested in purchasing would be considered .

Answers

Answer:

Joe lives in a mixed economy.

The building is a private property

Explanation:

A mixed economy allows individuals like Joe and companies to engage in commercial activities. It gives freedom to entrepreneurs to choose the type of business they wish to operate. Joe rents out apartments to clients. He and the client enters into a tenancy agreement, which suggests the presence of regulation. Consulting the owner of the property that he wishes to purchases shows there is an authority that regulates property transactions. A mixed economy gives buyers and sellers the freedom to do business but with regulation by a central authority.

The property that Joe wishes to buy is private property. It belongs to the seller and not to the public or government. Joe can only purchase a property and acquire its title if it is private property.

Answer:

1. mixed market

2. private property

The business analyst for Video Sales, Inc. wants to forecast this year's demand for DVD decoders based on the following historical data: Year Enrollments 5 Years ago 900 4 Years ago 700 3 Years ago 600 2 Years ago 500 Last Year 300 What is the forecast for this year using a three-year weighted moving average with weights of 0.5, 0.3, and 0.2?a) 163.
b) 180.
c) 300.
d) 420.
e) 510.

Answers

Answer:

d) 420

Explanation:

In three-year weighted moving average with weights of 0.5, 0.3, and 0.2, the forecast can be calculated using the following formula

Forecast(This year) = 0.5*Demand(last year) + 0.3*Demand(2 years ago) + 0.2*Demand(3 years ago)

Forecast(This year) = 0.5*300 + 0.3*500 + 0.2*600

Forecast(This year) = 150 + 150 + 120

Forecast(This year) = 420

The company you work for has decided to double stock their 1200 head WF curtain-sided barns. What changes/adjustments would you make to the ventilation controller settings to accommodate the extra pigs? What possible deficiencies could be created by double stocking?

Answers

Answer:

Changes to make in ventilation controller settings to accomodate the extra pigs

More width area of ventilation is required

Room temperature should be maintained.2-3 F

Ceilings should not be there as by double stockings more pigs be there so no ceilings provide more area to ventilate.

Deficiencies created by double stocking

Decrease on ADG by increase split put age,( p< 0.00)

Lower ADFI also by 7%

Growth rate decreased to 10 wk on after weaning process.

Examples of financial manager investment decisions​

Answers

Answer:

There are four main financial decisions- Capital Budgeting or Long term Investment decision (Application of funds), Capital Structure or Financing decision (Procurement of funds), Dividend decision (Distribution of funds) and Working Capital Management Decision in order to accomplish goal of the firm viz., to maximize

Which of the following is a cost of not carrying enough inventory?

a. possible worker layoffs.

b. customer disappointment

c. all of these

d. lost sales.​

Answers

Answer:

c

Explanation:

if you don't have enough to sell you lose sales.

You also lose selection and can also not have what a customer wants so that would leave in customer disappointment.

then you could also not have alot of money to pay your workers which would possibly result in worker layoffs

What methods can you use for setting the price? What tools are available for measuring the impact on your price decision?

Answers

Answer:

What methods can you use for setting the price? What tools are available for measuring the impact on your price decision?

In marketing we call it the 4 P's

1) Product

2) Price

3) Promotion

4) Place (location)

Whistle Stop pays a constant annual dividend of $4 on its stock. The company will maintain this dividend for the next 3 years and will then cease paying dividends forever. What is the current price per share if the required return on this stock is 15.6 percent?

a. $10.38
b. $9.52
c. $9.04
d. $9.28
e. $10.02

Answers

Answer:

P0 = $9.04279 rounded off to $9.04

Option c is the correct answer

Explanation:

Using the the dividend discount model, we calculate the price of the stock today. It values the stock based on the present value of the expected future dividends from the stock. To calculate the price of the stock today, we will use the following formula,

P0 = D1 / (1+r)  +  D2 / (1+r)^2  +  D3 / (1+r)^3

Where,

r is the required rate of return

P0 = 4 / (1+0.156)  +  4 / (1+0.156)^2  +  4 / (1+0.156)^3

P0 = $9.04279 rounded off to $9.04

Reginald owns a grocery and his clerks are on strike. Reginald is trying to operate the store with the help of his manager, but ten of the striking clerks are crowding near the store entrance with large picket signs. If Reginald asks you what can be done, your best answer would be for Reginald to:_______

a. seek a rescission that will return the clerks to their status quo.
b. merge law and equity.
c. seek a decree of specific performance.
d. seek an injunction.
e. hire Norris, Stallone and Segal

Answers

Answer:

merge law and equity

Explanation:

In resolving labour related or welfare issues the best way to do so will be to hear the grievances of the striking workers and try to find an equitable solution to the situation.

However if all reasonable avenues have been pursued and they still don't want to comply, then legal measures can be taken to make them work.

In this scenario Reginald should call the striking workers and try to come to an equitable solution for the business and workers where there will be a win-win.

If this does not work he can use the law to compel them to comply.

A company had a beginning balance in retained earnings of $43,900. It had net income of $6,900 and declared and paid cash dividends of $5,850 in the current period. The ending balance in retained earnings equals:________

a. $5,850
b. $12,750
c. $42,850
d. $44,950
e. $56,650

Answers

Answer: d. $44,950

Explanation:

Dividends are to be paid from Retained earnings so the ending retained earnings are;

= Beginning retained earnings + Net income - dividends

= 43,900 + 6,900 - 5,850

= $44,950

Which one of the five generic competitive strategies most closely approximates the competitive approach that Under Armour is employing?

a. a broad differentiation strategy
b. a focused low-cost strategy
c. a best-cost provider strategy
d. a focused differentiation strategy
e. a low-cost provider strategy

Answers

Answer: focused differentiation

Explanation:

Butcher Timber Company hired your consulting firm to help them estimate the cost of equity. The yield on the firm's bonds is 8.75%, and your firm's economists believe that the cost of equity can be estimated using a risk premium of 3.85% over a firm's own cost of debt. What is an estimate of the firm's cost of equity from retained earnings?

Answers

Answer:

12.60%

Explanation:

Calculation for the estimate of the firm's cost of equity from retained earnings

Using this formula

Estimate Firm's cost of equity =Risk premium + Cost of debt

Let plug in the formula

Estimate Firm's cost of equity=3.85% + 8.75%

Estimate Firm's cost of equity= 12.60%

Therefore the estimate of the firm's cost of equity from retained earnings will be 12.60%

When you listen, you are the___________ of the message.​

Answers

Answer:

reciever

Explanation:

when you listen you are the receiver and there after you should give the relevant feed back

What role do group dyanmics play in financial decisions? use examples of personal and buisness financial decisions.​

Answers

People who are typically sensible can be influenced by group dynamics to make decisions they would not have made otherwise. When certain members of a group help others overcome preconceptions, the results can be favorable.

What is an example of group dynamics in business financial decisions?

When certain members of a group assist others in overcoming preconceptions, the results are good like Resolve problems quickly,  Develop collaboration, Build communication and Help team leaders to develop.

Thus, group dynamics play an essential role in decision making.

For further details about group dynamics, click here:

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