Answer:
B
Explanation:
A currency appreciates when its value increases.
For example if $1 was exchanged for 50 pesos. After appreciation of the pesos, $1 would buy $25 pesos.
So more $2 would be needed to buy 50 peso after the appreciation when before the appreciation $1 was buying 50 pesos.
As a result Mexican goods would become more expensive to US consumers and the revenue earned by Mexican producers would increase
What are the two methods used to translate financial statements and how does the functional currency play a role in determining which method is used? Provide academic support in your response.
Answer:
The two methods of translating financial statements are the current rate method/closing rate method and the temporal method
Explanation:
Functional currency simply means the main currency used by a business. it could also be defined as the primary currency used in the economic environment in which a business operates as in where it generates most of its cash and also spends it
Functional currency determines to a large extent the method used in translation of financial statements. When there is no difference between local currency and foreign currency, current rate method is used and vice versa for temporal rate method
please find attached from Advanced Accounting
Hoyle, J., Schaefer, T., & Doupnik, T. (2015)
The common stock of the P.U.T.T. Corporation has been trading in a narrow price range for the past month, and you are convinced it is going to break far out of that range in the next three months. You do not know whether it will go up or down, however. The current price of the stock is $100 per share, and the price of a 3-month call option at an exercise price of $100 is $10. a. If the risk-free interest rate is 10% per year, what must be the price of a 3-month put option on P.U.T.T. stock at an exercise price of $100? (The stock pays no dividends.)
Answer:
A.$7.65
B. $17.65
C. $18.07
Explanation:
Calculation for the price of a 3-month put option on P.U.T.T. stock
Using this formula
P = C-S+[X/(1+r)T]
Where,
C represent call option price =$ 10
S represent spot price = $100
X represent exercise price =$100
T represent time period of put option =3 or 1/4months
R represent risk free return =10%
Let plug in the formula
P = C-S+[X/(1+r)T]
P = 10-100+[100/(1+0.10)1/4]
P = 10-100+[100/(1.10)1/4]
P = 10-100+[100/1.0241]
P = 10-100+97.65
P = 10-2.35
P = $7.65
Therefore the price of a 3 month put option stock will be $7.65
B. Calculation for What would be a simple options strategy .
The simple options strategy will be the straddle which will inturn enable the investor to buy one put option as well as one call option
Now let calculate for the The Total cost of straddle option
The Total cost of straddle option is = $10+$ 7.65
The Total cost of straddle option= $ 17.65.
The amount of amount of Total cost of straddle option will be $ 17.65.
C.Calculation for How far would it have to move in either direction inorder to make a profit ontl the initial investment
Inital investment Profit= $ 17.65×(1.10)^1/4
Initial investment Profit=$ 17.65×1.0241
Initial investment Profit= $ 18.07
Suppose that the central bank in this economy is concerned that inflation is too high and wants to lower the inflation rate by 6 percentage points per year. A reduction in the rate of inflation is known as_____. To reduce inflation from 8% to 2% in the short run, the central bank would have to accept an unemployment rate of_______%.
If people have rational expectations, the economy may not have to endure an unemployment rate as high as predicted by the short-run Phillips curve.
A. True
B. False
Answer:
i) Dis-inflation
ii) 9%
iii) True
Explanation:
A reduction in the rate of inflation is known as Dis-inflation and for the central bank to reduce inflation from 8% to 2% the central bank would have to accept a 9% unemployment rate
This can be proved below using this relationship
reduction of inflation = new inflation ( Δ u )
where Δ u = change in unemployment
hence increase in unemployment will be
Reduction of inflation / new inflation
= 6% points / 2% = 3%
From the intersection of the short-run Philips curve and the long run Philips curve when the inflation rate is at 8% the unemployment rat is at 6% and when the inflation rate falls to 2% the unemployment rate rises to 9% ( 6% + 3% ) the calculation above supports the effect of the reduction in inflation rate on unemployment rate
Due to Rational expectations from the people they will have to endure an unemployment as high as predicted this is in order to ensure a strong purchasing power for the currency ( True )
The correct words to fill the given blanks in the context of the excerpt would be as follows:
1). The term employed to denote the fall in inflation rate is called;
- Disinflation
2). The rate of inflation that the government will have to tolerate to reduce it to 2% would be:
- 9%
3). The claim proposed regarding the people's rational expectations preventing the excess rate of unemployment would be considered:
True
1). 'Disinflation' is described as the terminology that is employed to refer to the process by which the rate of inflation is provisionally downturned.
2). In order to bring a fall in the rate of inflation, the government may have to tolerate a temporary hike of being it at 9% as the association shown below:
As we know,
The fall in reduction = Δu(The new rate of inflation)
with Δu denoting the alteration in the rate of unemployment
∵ Increase in unemployment = Reduction of Inflation ÷ New rate of Inflation
= 6% ÷ 2%
= 3%
In order to reduce the rate to 2%,
The temporary rate of inflation would be 6% + 3% = 9%
3). In the situation of people having reasonable expectations, the inflation rate would be limited as purchasing power would be saved for necessary items as unnecessary wants are the primary cause of reduced purchasing power and unemployment. Thus, it is true.
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Suppose that the risk-free rate is 5% and that the market risk premium is 7%. What is the required return on (1) the market, (2) a stock with a beta of 1.0, and (3) a stock with a beta of 1.7? Ehrhardt, Michael C.. Corporate Finance: A Focused Approach (p. 286). Cengage Learning. Kindle Edition.
Answer:
1.
r market = 0.12 or 12%
2.
r stock = 0.12 or 12%
3.
r Stock = 0.169 or 16.9%
Explanation:
The required rate of return can be calculated using the CAPM or Capital asset pricing model equation. The formula for required rate of return under this model is,
r = rRF + Beta * rpM
Where,
rRF is the risk free raterpM is the risk premium on marketr represents the required rate of return1.
The beta of the market is always considered to be 1. Thus, the required rate of return on market would be,
r market = 0.05 + 1 * 0.07
r market = 0.12 or 12%
2.
For a stock whose beta is 1.0, the required rate of return would be same as that for market. So, the required rate of return for a stock with a beta of 1.0 is,
r Stock = 0.05 + 1 * 0.07
r Stock = 0.12 or 12%
3.
The required rate of return for a stock with a beta of 1.7 is,
r Stock = 0.05 + 1.7 * 0.07
r Stock = 0.169 or 16.9%
The accountant for Flagger Company prepared the following list of account balances from the company’s records for the year ended December 31:
Fees earned $165,000 Cash $30,000
Accounts receivable 14,000 Selling expenses 44,000
Equipment 42,000 Common stock 36,000
Accounts payable 12,000 Interest income 3,000
Salaries & wages expense 40,000 Rent expense 51,000
Income taxes payable 5,000 Prepaid Rent 2,000
Notes payable 20,000 Income taxes expense18,000
Prepare an income statement for Flagger Company in good form.
Flagger Company
Income Statement
For the Year Ended December 31
Revenues:
Accounts receivable $
Cash $
Expenses:
Rent expense $
Selling expenses
Salary and wages expense
Income taxes expense
Total expenses
Net income or loss $
Answer:
Net operating income $15,000
Explanation:
Flagger Company
Income statement for the year ended , 31 December
Fee earned
165,000
Less : Operating expenses
Salaries and wages 40,000
Rent expense. 51,000
(91,000)
Gross profit.
74,000
Less: Selling expense.
(44,000)
Profit before interest and tax.
30,000
Less interest expense.
(18,000)
12,000
Add: Interest income.
3,000
Net operating income.
15,000
If you can buy a single paper towel roll for $1.99 or 24 rolls of paper towels for $12.99, what is this an example of?
Answer: c) Second Degree Price Discrimination
Explanation:
The company selling the paper towels is reducing the price per quantity as more quantities are added.
This is an example of Second Degree Price Discrimination . Here the seller sells different quantities at different prices with higher quantities usually getting lower prices as a result of trade discounts the goal of which is to encourage more sales as opposed to less.
For instance, you could pay $50 a month for gym but be charged $7 if you just want to use it for a day.
If a business is greedy for profits, it is logically consistent for that business to also racially discriminate based on personal preference it might have. TRUE OR FALSE?
The statement is true that If a business is greedy for profits, it is logically consistent for that business to also racially discriminate based on personal preference it might have.
The business operates in the market with its primary goal to get profits from its sales. It makes them differentiate their customers depending on their status, race, gender, ethnics, and others in order to get the highest price from their sales.
Therefore, this discrimination is initiated with the help of a price discrimination policy, which means a business may charge a higher price from people from different racial groups.
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Iron Works International is considering a project that will produce annual cash flows of $38,500, $47,200, $57,900, and $23,400 over the next four years, respectively. What is the internal rate of return if the project has an initial cost of $112,500
Answer:
18.625%
Explanation:
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-112,500
Cash flow in year 1 = $38,500
Cash flow in year 2 = $47,200,
Cash flow in year 3 = $57,900,
Cash flow in year 4 = $23,400
IRR = 18.625%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
When do many companies expect to have a net loss? (Select three answers)
a. after they break even
b. when they have a gross profit
c. when they are first getting established
d. before they start having operating expenses
Answer:
C- When they are first getting established
Explanation:
Edge 2022
I have an idea that might address all of these issues. What if none of us have any of these donuts but instead we break up into teams and sell them to our coworkers for a profit
The full question reads;
Which legal school of thought is illustrated in this dialogue?
Alison: (She stands during David's speech as if inspired but sits down once Bob starts talking.)
Bob: Right. Power to the people David. Anyone else hungry? (He tries to slowly move to the donuts and Joyce continues to defend them like a point guard.)
Lee: I have an idea that might address all of these issues. What if none of us have any of these donuts but instead we break up into teams and sell them to our coworkers for a profit? Instead of getting one or two donuts, we can stop on our way home and pick up a dozen of them each with our profits. In this case, we ignore the company stick-in-the-mud book regulations because, as you can see, we are obviously presented with some opportunities for a little economic development. Corporate rules here must bow to economic opportunity. If we let our rules block our prosperity, what kind of company will we become?
OPTIONS:
• Legal realism school of thought.
• Law and economics school of thought.
• Sociological school of thought.
• Command school of thought.
Answer:
Legal realism school of thought.
Explanation:
Notice Lee's statement "we ignore the company stick-in-the-mud book regulations...Corporate rules here must bow to economic opportunity. If we let our rules block our prosperity, what kind of company will we become".
Interestingly, the legal realism school of thought looks at how laws (or as in this case corporate rules) should be understood and applied. So, in a sense, Lee has his own perception of the importance of the organization's rules.
The stock of Big Joe's has a beta of 1.40 and an expected return of 12.10 percent. The risk-free rate of return is 4.6 percent. What is the expected return on the market?
Answer:
5.403%
Explanation:
Calculation for the expected return on the market
Using this formula
Expected return =(Expected return-Risk-free rate of return)/Stock beta +Risk-free rate of return
Where,
Expected return=12.10%
Risk-free rate of return=4.6%
Stock beta =1.40%
Let plug in the formula
Expected return =(0.121-0.046)/0.014+0.046
Expected return =0.075/0.014+0.046
Expected return=5.357+0.046
Expected return =5.403%
Therefore the expected return on the market will be =5.403
Which of the following would be least likely to be considered a managerial accounting report?
A. a report to analyze potential efficiencies and savings for the purchase of new production equipment
B. a schedule of total manufacturing costs incurred
C. a statement of cost of goods manufactured
D. a statement of stockholders’ equity
Answer: a statement of stockholders’ equity
Explanation:
Out of the options that are given, the ones that are likely to be considered a managerial accounting report are a report to analyze potential efficiencies and savings for the purchase of new production equipment, a schedule of total manufacturing costs incurred and a statement of cost of goods manufactured.
Therefore, the least likely to be considered will be a statement of stockholders’ equity.
Suppose that the dollar cost of producing x radios is c(x) = 800 + 40x - 0.2x2. Find the marginal cost when radios are produced.
Answer:
MC = 40 – 0.4x
Explanation:
Given the cost of producing the radio, C(X) = 800 + 40x – 0.2x^2
Now we have to find the marginal cost from the total cost. Since we know that the marginal cost can be derived from the total cost by taking the differentiation of total cost function with respect to x. therefore, below is the calculation of marginal cost.
C(X) = 800 + 40x – 0.2x^2
MC = d(c)/dx = 40 – 0.4x
MC = 40 – 0.4x
Which description is the best example of human capital?
Explanation:
Human capital is the economic value of the abilities and qualities of labor that influence productivity. These qualities include higher education, technical or on-the-job training, health, and values such as punctuality. Investment in these qualities improves the abilities of the labor force.
The idea behind the Kanban system is to authorize materials for production only if there is a need for them.a) trueb) false
Answer: True
Explanation:
Kanban is a Lean tool that is designed in order to reduce idle time that occurs during production. The Kanban system was put in place to remove wastages so that what the process needs will be delivered exactly when they are needed.
The idea behind the Kanban system is to authorize materials for production only if there is a need for them.
On December 31, the fair value of Blossom is estimated to be $820,800. The carrying value of Blossom’s net identifiable assets, including the goodwill, at year-end is $855,000. Prepare Cullumber’s journal entry, if necessary, to record impairment of goodwill.
Answer:
Dr goodwill impairment $34200
Cr goodwill $34200
Explanation:
The fact that the fair value of Blossom’s net identifiable assets is less than the carrying value is a strong indication that the goodwill has been impaired and the impairment is computed thus:
Goodwill impairment=Fair value of net assets-carrying value
fair value of net assets=$820,800
Carrying value of net assets=$855,000
goodwill impairment=$855,000-$820,800=$34200
The double entries would be a debit to goodwill impairment loss account in the statement of profit or loss and a credit to goodwill.
Employees in engineering and marketing divisions often disagree with each other about how to achieve targets mainly because they have unique backgrounds, experiences, and training. The most apparent source of conflict here is
Answer: differentiation
Explanation:
From the question, we are informed that employees in engineering and marketing divisions often disagree with each other about how to achieve targets mainly because they have unique backgrounds, experiences, and training.
The above source of conflict is due to differentiation. The differentiation is as a result of them not working in thesame divisions hence, they see things differently and not in the same way.
As a part of the internal control over cash receipts by mail, the mailroom sends both the customer checks and the remittance advices to the accounting department.
a) true
b) false
Answer: False
Explanation:
From the question, we are informed that as a part of the internal control over cash receipts by mail, the mailroom sends both the customer checks and the remittance advices to the accounting department. This is not true.
It should be noted that the customer checks and the remittance advices are sent to the cashier and not the accounting department
Gardiner, Inc. reported a retained earnings balance of $190,000 at December 31, 2024. In June 2025, Gardiner discovered that merchandise costing $20,000 had not been included as ending inventory in its 2024 financial statements. Also, a $50,000 accrued revenue was omitted on 12/31/24. Gardiner has a 20% tax rate. Assuming the correcting journal entry net of tax was recorded, what amount should Gardiner report as adjusted beginning retained earnings in its statement of retained earnings for year ended December 31, 2025?
Answer: $246,000
Explanation:
Merchandise costing $20,000 had been omitted from the Ending Inventory.
Ending inventory is deducted from Cost of Goods sold which means that the Cost of Goods sold was overstated by $20,000.
Cost of Goods sold are subtracted from sales to find Gross Income so if it was overstated then Income was understated by $20,000.
Accrued Revenue is to be added to Income so if it was omitted then income was understated by $50,000.
Income in total was therefore understated by = 20,000 + 50,000
= $70,000
The correcting entry is net of tax so;
= 70,000 * ( 1 - 20%)
= $56,000
Retained earnings will therefore be;
= 190,000 + 56,000
= $246,000
If the Open Market Purchase is $1 billion by approximately how much will the supply of Money increase
Answer: $10 billion
Explanation:
Increase in the money supply can be calculated by multiplying the injection of cash into the economy by the Money Multiplier which is calculated as;
= 1/ reserve ratio
Reserve ratio = 10%
Money Multiplier = 1 / 10%
= 10
The money supply will therefore increase by;
= 1,000,000,000 * 10
= $10,000,000,000
= $10 billion
The cash cycle measures the days required to produce finished goods or delivered services. true/false
Answer: False
Explanation:
The cash cycle is also referred to as the cash conversion cycle and it is used to know the number of days it'll take companies to turn raw materials into making money.
It is the timeframe from buying raw materials for production purpose till the moment the product that was made is being sold and money gotten from the sale.
The estimated direct labor cost for February is closest to: Multiple Choice $456,000 $28,652 $253,460 $658,996
This question is incomplete, the complete question is;
Petrini Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: The budgeted selling price per unit is $110. Budgeted unit sales for January, February, March, and April are 7,500, 10,600, 12,000, and 11,700 units, respectively. All sales are on credit. Regarding credit sales, 30% are collected in the month of the sale and 70% in the following month. The ending finished goods inventory equals 30% of the following month's sales. The ending raw materials inventory equals 10% of the following month’s raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $4.00 per pound. Regarding raw materials purchases, 40% are paid for in the month of purchase and 60% in the following month. The direct labor wage rate is $23.00 per hour. Each unit of finished goods requires 2.6 direct labor-hours. Manufacturing overhead is entirely variable and is $8.00 per direct labor-hour. The variable selling and administrative expense per unit sold is $1.70. The fixed selling and administrative expense per month is $70,000.
The estimated direct labor cost for February is closest to: Multiple Choice $456,000 $28,652 $253,460 $658,996
Answer: The estimated direct labor cost for February is closest to D) $658,996.
Explanation:
Estimated direct labor cost for February =
Production units in February × Direct labor hours for each finished goods unit × Direct labor wage rate per hour
Ef = 11020 units × 2.6 labor hours per unit ×$23 per direct labor hour
Ff= $658,996
Also
Where Production units in February = February sales units + Ending finished goods units - Beginning finished goods units
Pf = 10600 units + (12000 units*30%) - (10600 units*30%)
Pf = 10600 units+3600 units-3180 units
Pf = 11020 units
If there were 50000 pounds of raw materials on hand on January 1, 140000 pounds are desired for inventory at January 31, and 530000 pounds are required for January production, how many pounds of raw materials should be purchased in January?
Answer:
620,000 pounds
Explanation:
The computation of the number of pounds required raw material purchased in Jan is shown below:
Pounds of raw materials purchased is
= Pounds of material required for production + Desired Ending Inventory - Beginning Inventory
= 530,000 pounds + 140,000 pounds - 50,000 pounds
= 620,000 pounds
Hence, the number of pounds to be purchased is 620,000 pounds
There is no nation involved in global trade that still maintains a fixed value of their currency relative to a key currency or gold
a. true
b. false
Answer:
a. true
Explanation:
Gold is a currency that is the free market system that will fluctuate tp the form of exchange and no country in international trade can maintain a fixed value of its currency relative to the key currency though they can trade gold in multiple ways and can participate in price movements.77. Identify a potential risk for businesses using E-Commerce. a. increased customer satisfaction b. the possibility of fraudulent transactions c. inconvenience of returns d. none of the above
Answer:
B. The possibility of fraudulent transactions.
Explanation:
In recent times, it is well known and well known that marketplaces have also included the buying and selling in different other levels which E-commerce has thrived in many ways and are tested to be worth a while. In as much as it is good, e-commerce business in recent times has given a lot of exposure and access to a larger audience. And this has been learnt to have not certainly been possible to achieve through conventional retailing methods. In as much as it is loved by a reasonable amount of people, it is seen to have also made business owners and customers prone to serious security threats; which may include forms like online security breach, client disputes and refunds
Violation of Intellectual property, credit cards scams, poor customer service only to mention but few which are risky too.
Breaches of this form are seen to the risks that can affect your business and you can bear the loss if they are not addressed properly.
A team integrates and tests the Stories on the last day of the Iteration. This has become a pattern for the last three Iterations. Why is this considered an anti-pattern? g
Answer: Because the team is waterfalling the iteration
Explanation:
The options to the question are:
a. Because the team consistently meets their commitments, and the Product Owner accepts the stories
b. Because the team is waterfalling the iteration
c. Because the team demonstrates the full stories to the product owner during the iteration review.
d. Because it is difficult to manage dependencies with other teams.
An anti-pattern is a pattern that show that a particular idea will be ineffective, risky and can create further havoc.
Therefore, based on the scenario that a team integrates and tests the stories on the last day of the Iteration which has become a pattern for the last three Iterations.
This is an anti pattern because the team is waterfalling the iteration since the stories are tested on the last day therefore it'll be hard for any adjustments to be made.
Porter Inc's stock has an expected return of 10.75%, a beta of 1.25, and is in equilibrium. If the risk-free rate is 5%, what is the expected market risk premium
Answer:
the expected market risk premium is 4.6%
Explanation:
The computation of the expected market risk premium is shown below:
As we know that
Expected rate of return = Risk free rate of return + beta × market risk premium
10.75% = 5% + 1.25 × market risk premium
5.75% = 1.25 × market risk premium
So, the market risk premium is
= 5.75% ÷ 1.25
= 4.6%
hence, the expected market risk premium is 4.6%
we simply applied the above formula
A bank is insolvent when its liabilities exceed its assets. its assets increase in value. its assets exceed its liabilities. its capital exceeds its liabilities.
Answer:
The answer is A. when its liabilities exceed its assets.
Explanation:
Insolvency is the state of not being able to pay its long-term debt or liability. If a liability exceeds assets, the company is at the risk of liquidation, it becomes a going concern issue. And meeting its short term obligation (liquidity) or long-term obligation (solvency) is in doubt.
One of the ratio to determine insolvency is debt-to-equity ratio.
Successful advertising can increase demand across a wide spectrum of consumers, but it happens unevenly. Some consumers respond more dramatically than others to advertising. This explains the change in ________ of the demand curve that occurs after an advertising campaign.
Answer:
Elasticity.
Explanation:
Successful advertising can increase demand across a wide spectrum of consumers, but it happens unevenly. Some consumers respond more dramatically than others to advertising. This explains the change in elasticity of the demand curve that occurs after an advertising campaign. Thus, the more responsive consumers are to an advert, the more elastic the consumer demand is for the successful advertising technique used by the firm.
What is NOT a major purpose of orientation and socialization? Reducing stress and anxiety Reducing employee benefits Reducing start-up costs Reducing employee turnover
Answer: Reducing employee benefits
Explanation:
When a new employee is added to the company, it is best to give them and orientation as well as to encourage other employees who have been there longer to talk to them. This can be beneficial to the employee because it will help them settle into the job faster, thus giving them more confidence to be able to overcome the stress an anxiety that may come with starting a new job.
It is also beneficial to the company as the employee will learn skills needed to survive in the job. This will reduce wastage that may accrue due to a lack of knowledge on the part of the employee of job procedure.
With the above two contributing to making the employee feel more comfortable as well as able to do their jobs, employees will have less reason to leave the job thereby reducing employee turnover.
Orientation and Socialization will not reduce employee benefits and so it is not a major purpose of the activity.