Answer:
Suppose that the number of students with an allergy to pencil erasers increases, causing more students to switch from pencils to pens in school.
This will shift the demand curve to the right, increasing the total demand at all price levels.Moreover, the price of ink, an important input in pen production, has increased considerably.
This will shift the supply curve to the left, increasing the price of pens at every demand level.What is sure is that the price of pens will increase. It is likely that the quantity demanded increases, but the extent by which the quantity demanded will increase is unknown.
Based on the case and previous calculations, please answer the following short answer questions. Note: Your instructor will need to manually grade these questions. 1. Refer to Exhibit 4 (Financial Breakdown). What were the largest and smallest divisions by net sales in 2017? Identify the one most important division in terms of the proportionate net earnings for the company.
Question Completion:
see Exhibit 4 attached.
Answer:
1. The largest and smallest divisions by net sales in 2017:
Largest divisions:
Fabric & Home care with 32%
Baby, Feminine & Family Care, 28%
Smallest divisions:
Beauty with 18%
Grooming, 11%
Healthcare, 11%
2. The one most important division in terms of the proportionate net earnings for the company is:
Fabric & Home Care
Explanation:
The two largest divisions generate 60% of the net sales of the company while the three smallest divisions generate only 40%. In terms of the proportionate net earnings for the company, the two largest divisions also generate 53% of the net earnings of the company, while the three smallest divisions generate 47%. The analysis shows that the company's financial sustenance is largely driven by the Fabric & Home Care division and the Baby, Feminine & Family Care division. Another up-and-coming division is the Beauty division, which generates 18% of the net sales and 20% of the net earnings.
Choro Mining is expected to generate the above free cash flows over the next four years, after which they are expected to grow at a rate of 3% per year. If the weighted average cost of capital is 7% and Conundrum has cash of $80 million, debt of $60 million, and 30 million shares outstanding, what is Choro's expected current share price
Answer: $19.85
Explanation:
Expected current share price = (Present value of free cash flows + Cash holdings - Debt) / Shares outstanding
Present value of free cash flows.
Present value = Year 1 present value + Year 2 present value + Year 3 present value + Year 4 present value + Present value of Terminal value
Terminal value = (Free cash flow * (1 + growth rate)) / (Cost of capital - growth rate)
= (26 * 1.03) / (7% - 3%)
= $669.50
Present value = (12 / 1.07) + (18/ 1.07²) + (22 / 1.07³) + (26 / 1.07⁴) + (669.50 / 1.07⁴)
= $575.49 million
Expected current price = (575.49 + 80 - 60) / 30
= $19.85
One of the keys to successful production planning is resource management. _____ is a system that would note how a possible strike in an Evanston, Indiana, plant will threaten supplies of a needed component part as well as how customer growing preference for time-saving devices such as the company markets and use this information in production planning.
a) Enterprise resource planning (ERP)
b) Manufacturing resource planning II (MRPII)
c) The PERT chart
d) Manufacturing resource planning (MRP)
e) Computer-aided resource planning (CARP)
Answer:
a) Enterprise resource planning (ERP)
hopethis helps!
A firm has beginning retained earnings of $6,880 and ending retained earnings of $7,430. What is the amount of dividends paid if the firm earned a net income of $5,130
Answer:
the dividend paid is $4,580
Explanation:
The computation of the amount of the dividend paid is as follows:
As we know that
Ending retained earning balance = Beginning retained earning balance + net income - dividend paid
$7,430 = $6,880 + $5,130 - dividend paid
So, the dividend paid is $4,580
Having which trait will enable you to deal with people in a way that does not offend them?
Answer:
Interpersonal skills..
Why are credit card companies more willing to offer a young person a secure
credit card than an unsecured card?
Answer:
Some of the best credit cards for college students often include secured credit cards because approval rates are high on these cards. Secured credit cards for families with no credit or poor credit are great for building up good credit with minimal risk compared to unsecured cards
Explanation:
g widgets inc plans to produce 8000 widgets during the upcoming year. each widget requires four direct labor hours at 25 per hour and 110 in direct material costs .... compute the predetermined overhead rate per direct labor hour
Answer:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Explanation:
Giving the following information:
Production= 8,000 units
Direct labor hours= 4*8,000= 32,000 hours
To calculate the predetermined overhead rate, we need the estimated overhead costs. We don't have the number, but I will provide a fake number, and determine the overhead rate.
Estimated overhead costs= $1,500,000
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 1,500,000 / 32,000
Predetermined manufacturing overhead rate= $46.875 per direct labor hour
When an employee is paid biweekly this means..."
They are paid every two weeks
They will receive 24 paychecks
They are paid on two specific days, such as the 14th and the 30th of every month
All of the above
Answer:
every 2 weeks
Explanation:
done,produced or occurring every 2 weeks
A local university has a goal of raising $500,000 for an escrow account. Their fund-raising committee has committed to raising $5,000 a month until they reach their goal. These funds are deposited into an interest-bearing account that earns interest at the rate of 8 percent per year compounded monthly. The first deposit is made at the end of the current month. How many months (aka how many deposits) can the committee expect to continue their fund-raising campaign
Answer: 77 months
Explanation:
Use the NPER function on Excel to find the answer.
Rate is compounded monthly so:
= 8% / 12
= 0.66667%
Payment = 5,000 per month
Present value = $0
Future value = 500,000
Value should be = 76.87 months
= 77 months
A company purchased $10,000 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. The freight charge, $500, was added to the invoice amount. On June 20, it returned $800 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The cash paid on June 24 equals:
Answer:
the cash paid as on June 24 is $9,424
Explanation:
The computation of the cash paid as on June 24 is as follows:
= Merchandise cost + Freight charge - Purchase returns - Discount Eligible at 3%
= $10,000 + $500 - $800 - [($10,000 - $800) × 0.03]
= $10,000 + $500 - $800 - $276
= $9,424
Hence, the cash paid as on June 24 is $9,424
Assault and battery is a tort not a crime when the action involves people who know each other
Answer:
it is an assault if they know you, but they can choose if you are accused of it.
Explanation:
You've collected the following information about a company: Assets Liabilities and Equity Cash 13,000 Accounts payable 16,000 Marketable securities 2,000 Notes payable 6,000 Accounts receivable 4,000 Current liabilities Inventory 32,000 Long-term debt 95,000 Current assets Total liabilities Machines 34,000 Paid-in capital 20,000 Real estate 80,000 Retained earnings Fixed assets Equity Total assets Total liab. & equity Attempt 1/10 for 10 pts. Part 1 What are total assets? 165000 Correct ✓ Total assets are the sum of current and fixed assets. Assets Liabilities and Equity Cash 13,000 Accounts payable 16,000 Marketable securities 2,000 Notes payable 6,000 Accounts receivable 4,000 Current liabilities Inventory 32,000 Long-term debt 95,000 Current assets 51,000 Total liabilities Machines 34,000 Paid-in capital 20,000 Real estate 80,000 Retained earnings Fixed assets 114,000 Equity Total assets 165,000 Total liab. & equity Total assets = Current assets + Fixed assets = 51,000 + 114,000 = 165,000
Answer:
The answer is "$228,000"
Explanation:
Formula:
[tex]\text{Total Assets = Current Assets + Fixed Assets}[/tex]
[tex]= [\$ 13,000 + \$ 2,000 + \$ 4,000 + \$ 95,000] + [\$ 34,000 + \$ 80,000]\\\\= [\$ 114,000] + [\$ 114,000]\\\\= \$ 228,000[/tex]
Determine the amount of the standard deduction allowed for 2020 in the following independent situations. In each case, assume that the taxpayer is claimed as another person's dependent. Amount of the Standard Deduction a. Curtis, age 18, has income as follows: $700 interest from a certificate of deposit and $12,600 from repairing cars.$fill in the blank 1 b. Mattie, age 18, has income as follows: $600 cash dividends from a stock investment and $4,700 from handling a paper route.$fill in the blank 2 c. Jason, age 16, has income as follows: $675 interest on a bank savings account and $800 for painting a neighbor's fence.$fill in the blank 3 d. Ayla, age 15, has income as follows: $400 cash dividends from a stock investment and $500 from grooming pets.$fill in the blank 4 e. Sarah, age 67 and a widow, has income as follows: $500 from a bank savings account and $3,200 from babysitting.$fill in the blank 5
Answer:
A. $12,000
B. $5,050
C. $1,150
D.$1,050
E. $5,150
Explanation:
a. Calculation to Determine the amount of the standard deduction allowed for 2020 for Curtis
2020 Standard deduction allowed =$12,600+$350
2020 Standard deduction allowed=$12,950
Based on the above calculation the Standard deduction allowed was $12,950 which is higher or Exceeded the 2020 standard deduction of the amount of $12,000 for a single taxpayer which means that the amount of the standard deduction allowed for 2020 for Curtis will be $12,000.
b. Calculation to Determine the amount of the standard deduction allowed for 2020 for Mattie
2020 Standard deduction allowed =$4,700+$350
2020 Standard deduction allowed=$5,050
Therefore the amount of the standard deduction allowed for 2020 for Mattie will be $5,050
c. Calculation to Determine the amount of the standard deduction allowed for 2020 for Jason
2020 Standard deduction allowed =$800+$350
2020 Standard deduction allowed=$1,150
Therefore the amount of the standard deduction allowed for 2020 for Jason will be $1,150
d. Calculation to Determine the amount of the standard deduction allowed for 2020 for Ayla
Based on the information given the amount of the standard deduction allowed for 2020 for Ayla will be the amount of $1,050 reason been that the 2020 standard deduction allowed for for Ayla cannot in any way exceed the amount of $1,150 or $850 which is Calculated as ($500+$350)
Therefore the amount of the standard deduction allowed for 2020 for Ayla will be $1,050
e. Calculation to Determine the amount of the standard deduction allowed for 2020 for Sarah
2020 Standard deduction allowed =$3,200+$350+$1,600
2020 Standard deduction allowed=$5,150
Note that the amount of $1,600 represent the standard additional deduction.
Therefor thee amount of the standard deduction allowed for 2020 for Sarah will be $5,150
Richards Company manufactures a single product. All raw materials used are traceable to specific units of product. Current information for the company follows: Beginning raw materials inventory $ 10,000 Ending raw materials inventory 12,000 Raw material purchases 90,000 Beginning work in process inventory 40,000 Ending work in process inventory 25,000 Direct labor 130,000 Total factory overhead 60,000 Beginning finished goods inventory 55,000 Ending finished goods inventory 45,000 The company's cost of direct materials used, cost of goods manufactured and cost of goods sold is:
Answer:
1.Cost of Raw Materials $88,000
2.Cost of Goods Manufactured $293,000
3. Cost of Goods Sold $321,000
Explanation:
1. Calculation for the Cost of Raw Materials Used using this formula
Cost of Raw Materials = Beginning Inventory + Purchases - Ending Inventory
Let plug in the formula
Cost of Raw Materials= $10,000 + $90,000 - $12,000
Cost of Raw Materials= $88,000
B) Calculation of Cost of Goods Manufactured
Using this formula
Cost of Goods Manufactured = Beginning Work in process Inventory + Direct Material + Direct Labor+ Factory Overhead - Ending Work in process
Let plug in the formula
Cost of Goods Manufactured = $ 40,000 + $88,000 + $130,000 + $60,000 - $25,000
Cost of Goods Manufactured = $293,000
3. Calculation for Cost of Goods Sold
Using this formula
Cost of Goods Sold=Beginning Inventory + Production During Period - Ending Inventory
Let plug in the formula
Cost of Goods Sold= $40,000 + $293,000 - $12,000
Cost of Goods Sold= $321,000
Therefore The company's cost of direct materials used, cost of goods manufactured and cost of goods sold will be :
1.Cost of Raw Materials $88,000
2.Cost of Goods Manufactured $293,000
3. Cost of Goods Sold $321,000
During the month of March, Harley's Computer Services made purchases on account totaling $45,500. Also during the month of March, Harley was paid $11,000 by a customer for services to be provided in the future and paid $37,900 of cash on its accounts payable balance. If the balance in the accounts payable account at the beginning of March was $78,300, what is the balance in accounts payable at the end of March
Answer:
$85,900
Explanation:
The balance in the account payable at the end of March is computed as;
= Beginning balance of account payable + purchase made - paid amounts of its account payable balance
= $78,300 + $45,500 - $37,900
= $85,900
Please note that the amount for services to be provided in the future is not in anyway related to account payable, thereby must be excluded.
Randolph Company reported pretax net income from continuing operations of $1,010,500 and taxable income of $667,500. The book-tax difference of $343,000 was due to a $213,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $138,000 due to an increase in the reserve for bad debts, and a $268,000 favorable permanent difference from the receipt of life insurance proceeds. Randolph Company’s applicable tax rate is 34%.A. Compute Randolph Company’s current income tax expense.B. Complete the reconciliation of Randolph Company’s effective tax rate with its hypothetical tax rate of 34%C. Compute Randolph Company’s effective tax rate.
D. Compute Randolph Company’s deferred income tax expense or benefit.
Answer:
A. Current income tax expense = $226,950
B. Reconciliation of effective tax rate with hypothetical tax rate gives an effective tax rate of 24.98%.
C. Effective tax rate = 24.98%
D. Deferred income tax expense is $25,500
Explanation:
A. Compute Randolph Company’s current income tax expense.
Current income tax expense = (Pretax net income from continuing operations - Favorable temporary difference relating to depreciation + Unfavorable temporary difference - Favorable permanent difference) * Applicable tax rate = ($1,010,500 - $213,000 + $138,000 - $268,000) * 34% = $226,950
B. Complete the reconciliation of Randolph Company’s effective tax rate with its hypothetical tax rate of 34%
Hypothetical tax rate = Applicable tax rate = 34%
Income tax expense = Pretax net income from continuing operations * Applicable tax rate = $1,010,500 * 34% = $343,570
Tax benefit from Favorable permanent difference = Favorable permanent difference * Applicable tax rate = $268,000 * 34% = $91,120
Income tax provision = Income tax expense - Tax benefit from Favorable permanent difference = $343,570 - $91,120 = $252,450
Rate of tax benefit from Favorable permanent difference = (Tax benefit from Favorable permanent difference / Pretax net income from continuing operations) * 100 = ($91,120 / $1,010,500) * 100 = 9.02%
Therefore, we have reconciliation of effective tax rate with hypothetical tax rate as follows:
Effective tax rate = Hypothetical tax rate - Rate of tax benefit from Favorable permanent difference = 34% - 9.02% = 24.98%
C. Compute Randolph Company’s effective tax rate.
Effective tax rate = (Total income provision / Pretax net income) * 100 ......... (1)
Where:
Total income provision = Current income tax expense + Deferred income tax expense = $226,950 + $25,500 = $252,450
Pretax net income = $1,010,500
Substituting the values into equation (1), we have:
Effective tax rate = ($252,450 / $1,010,500) * 100 = 24.98%
D. Compute Randolph Company’s deferred income tax expense or benefit.
Deferred income tax expense or benefit = (-Favorable temporary difference relating to depreciation + Unfavorable temporary difference) * Applicable tax rate = (-$213,000 + $138,000) * 34% = -$25,500
Since the answer is negative, it implies that it is a Deferred income tax expense of $25,500
As you develop your personal marketing plan and career strategy, it is important that you look at ways to match your strengths with careers that will be rewarding financially and personally. Four common jobs that new marketing graduates begin their career in are pricing analyst, fleet manager, salesperson, and event coordinator. Each of these provides an opportunity for a great job and career in marketing. In addition, each requires specific skills that, if developed, will help make graduates in each of these roles successful. Match the specific skills to the job where they are most important. As you do so, think about how your talents and abilities might make you a perfect candidate for one or more of these jobs.
Answer:
1. Superior Listening Skills - Sales person
2. Excellent organizational skills - Event Coordinator
3. Strong quantitative skills - Pricing analyst
4. Good researcher, comfortable scanning the environment - Sales person
5. Time management skills - Event coordinator
6. Patience - Sales person
7. Terrific persuasion skills - Sales person
8. Excellent Vehicle knowledge. - Fleet manager
Explanation:
There are various careers which are suitable for marketing graduates. The four most common career choices by marketing graduates are listed in the scenario. Skills which are required for a sales person is that he must be calm and able to deal with the customers. He should be persuasive in nature so that he ends up the meeting with customers positively. Event manager has to be patient as well as he must have time management skills. It is responsibility of the event manager to organize the event and follow the timelines.
Division of work means that similar activities in an organization should be grouped together under one manager.
Answer:
True.
Explanation:
Division of work is the act of "dividing the work equally among a group of people."
"You think that you will be able to retire when you have $1 million dollars in your retirement account. Currently, you only have $200,000 in the account. You plan to save $5000 every year, and your account can generate an annual return of 6%. How many more years you need to work before you can retire?"
Answer:
23 years
Explanation:
PV = 200000
PMT = 5000
RATE = 6%
FV = 1000000
Number of years = Nper(Rate, -Pmt, -Pv, Fv)
Number of years = Nper(6%, -5000, -200000,1000000)
Number of years = 23 years
Please answer thank you !
Answer:
its the 1st one
2. Firm A has a 15 percent marginal tax rate and Firm Z has a 35 percent marginal tax rate. Firm A owns a controlling interest in Firm Z. The owners of Firm A decide to incur a $40,000 deductible expense that will benefit both firms. Compute the after-tax cost of the expense assuming that: a) Firm A incurs the expense.
Answer: $34000
Explanation:
From the question, we are informed that Firm A has a 15 percent marginal tax rate. Based on the information given, the after tax cost that Firm A will incur will be:
= $40000 - ($40000 × 15%)
= $40000 - ($40000 × 0.15)
= $40000 - $6000
= $34000
In 2021, Holyoak Inc. offers a coupon for $20 off qualifying purchases of its new line of products. Holyoak sold 11,400 of these products during the year. By year-end of 2021, 8,500 coupons had been redeemed and the $20 reduction of purchase price provided to customers. Holyoak's historical experience with such coupons indicates that 85% of customers use the coupon. Holyoak recognizes coupon expense in the period coupons are issued. What is the expense that Holyoak should report for its promotional coupons in its 2021 income statement
Answer: $193,800
Explanation:
Based on the information given in the question, the expense that Holyoak should report for its promotional coupons in its 2021 income statement would be calculated as:
= 11400 × 85% × 20
= 11400 × 85/100 × 20
= 11400 × 0.85 × 20
= $193,800
The Internal Revenue Service Department of Tax Regulations writes regulations in accord with laws passed by Congress. On average, the department completes 300 projects per year. The Wall Street Journal reported that, as of October 11, 1997, the number of projects "on the Department’s plate" was 588. Nevertheless, the department head claimed that average time to complete a project was under six months. Do you have any reason to disagree? Why or why not?
Answer:
The IRS's claim (that the average time it takes to complete a project is < 6 months) is wrong. It takes the Department 23.52 months to complete a project.
Explanation:
a) Data and Calculations:
Number of projects "on the Department’s plate" (I) = 588 Projects
Average projects completed per year (R) = 300 Projects
Therefore, the flow time (the average time to complete a project by the department), T, = I / R
= 588 / 300 = 1.96 years = 1.96 X 12 = 23.52 months
b) The steps to calculate flow time (the amount of time a flow unit spends in a business process from beginning to end) are given as:
1. The number of projects handled over a period of time.
2. Let R = the number of units produced / duration of time period .
3. Compute the average inventory (I).
4. Compute flow time T =I/R.
Insurance expense incurred on a factory building would be treated as aInsurance expense incurred on a factory building would be treated as aInsurance expense incurred on a factory building would be treated as aInsurance expense incurred on a factory building would be treated as a
Answer:
product cost
Explanation:
Product costs are simply defined all costs incurred when acquiring or making a product. It is any materials that is a part of the product, it entails also the cost of workers who touch the product to produce it with all the costs of the facility and management that is needed to make the product. There are simply 3 main categories of product costs which are direct materials, direct labor and manufacturing overhead.
Insurance Expense gives proper details about an insurer's profitability by line of business, allocation of other underwriting expenses, allocation of pretax profit by line, on a net basis and allocation of pretax profit by line, on a direct basis.
Why is the United States concerned about China’s devaluation of the yuan?
Answer:
a stronger dollar cuts into inflation in the United States, and it might force the fed to cut interest rates by more than it would otherwise to sustain its desired pace of growth and price gains.
Explanation:
A project has been assigned a discount rate of 12 percent. If the project starts immediately, it will have an initial cost of $480 and cash inflows of $350 a year for three years. If the start is delayed one year, the initial cost will rise to $520 and the cash flows will increase to $385 a year for three years. What is the value of the option to wait
Answer: $0.70
Explanation:
The value of the option to wait would be calculated thus:
Year Cash flow PVF at 12% PV
0 $-480 1.000 $(480.00)
1 $350 0.893 $312.50
2 $350 0.797 $279.02
3 $350 0.712 $249.12
Then, the Net present value will be:
= 312.50 + 279.02 + 249.12 - 480.00
= $360.64
Year Cash flow PVF at 12%. PV
0 $-1.000 1.000. 0
1 $-520 0.893 $(464.29)
2 $385 0.797 $306.92
3 $385 0.712 $274.04
4 $385 0.636 $244.67
Net present value = $361.34
The value of the option to wait would then be calculated as:
= $361.34 - $360.64
= $0.70
What is currency in economics
Answer:
Currency, in industrialized nations, portion of the national money supply, consisting of bank notes and government-issued paper money and coins, that does not require endorsement in serving as a medium of exchange; among less developed societies, currency encompasses a wide diversity of items (e.g., livestock, stone carvings, tobacco) used as exchange media as well as signs of value or wealth. In the developed nations, where checks drawn on demand deposits are an important means of transaction, currency may actually account for only a small portion of the total money supply
Explanation:
Since the abandonment of the gold standard in the 1930s, governments have not been obligated to repay the holders of currency in any form of precious metal. Consequently the volume of currency is determined by the actions of the government or central bank and not by the supply of precious metals.
Assume that John deposits $8,000 into an account that has a 2.4% annual interest rate for 8 years. (a) If the interest is compounded annually, there will be $ in the account. (b) If the interest is compounded monthly, there will be $ in the account. (c) If the interest is compounded weekly, there will be $ in the account. (d) If the interest is compounded daily, there will be $ in the account. (e) If the interest is compounded continuously, there will be $ in the account.
Answer:
a) Compounded Annually = $9671.41
b) Compounded Monthly = $9691.51
c) Compounded Weekly = $9692.93
d) Compounded Daily = $9693.30
e) Compounded Continuously = $9693.36
Explanation:
Solution:
This question is very simple. We just need to know the basic formula.
Data Given:
P = Principal Amount = $8000
i = interest rate = 2.4% annual
n = period or year = 8 years.
So, our basic formula is:
A = P [tex](1 + \frac{r}{100}) ^{n}[/tex]
a) Compounded Annually.
A = P [tex](1 + \frac{r}{100}) ^{n}[/tex]
A = 8000 [tex](1 + \frac{0.024}{100}) ^{8}[/tex]
A = $9671.41
b) Compounded Monthly:
1 year = 12 months.
A = P [tex](1 + \frac{r}{100*12}) ^{n*12}[/tex]
A = 8000 [tex](1 + \frac{0.024}{100*12}) ^{8*12}[/tex]
A = $9691.51
c) Compounded Weekly:
1 year = 52 weeks
A = P [tex](1 + \frac{r}{100*52}) ^{n*52}[/tex]
A = 8000 [tex](1 + \frac{0.024}{100*52}) ^{8*52}[/tex]
A = $9692.93
d) Compounded Daily:
1 year = 365 days
A = P [tex](1 + \frac{r}{100*365}) ^{n*365}[/tex]
A = 8000 [tex](1 + \frac{0.024}{100*365}) ^{8*365}[/tex]
A = $9693.30
e) Compounded Continuously:
For this we have following formula:
A = P[tex]e^{\frac{n*r}{100} }[/tex]
A = P[tex]e^{\frac{8*0.024}{100} }[/tex]
A = $9693.36
Experience indicates that strategic alliances Multiple Choice have a high "divorce rate." are generally successful. work well in cooperatively developing new technologies and new products but seldom work well in promoting greater supply chain efficiency. work best when they are aimed at achieving a mutually beneficial competitive advantage for the allies. are rarely useful in helping a company win the race for global industry leadership and establish positions in industries of the future.
Answer:
have a high "divorce rate."
Explanation:
A strategic alliance can as well reffered to as strategic partnership and can be regarded as agreement that exist between two parties or more so that they can work in acheiving some objectives they agreed on even though they still remains as an independent organization to each other. It should be noted that Experience indicates that strategic alliances have a high "divorce rate."
8. Effective Yield. A US investor obtain British pounds when the pound is worth $1.50 and invest in a one year-money market security that provides a yield of 5 percent (in pounds). At the end f one year, the investor converts the proceeds from investment to dollars at the prevailing spot rate of $1.52 per pound. Calculate the effective yield.
Answer:
6.4%
Explanation:
money invest = $1.50 or 1£
interest earned = 1£ x 5% = 0.05£
total returns = 1.05£
now we convert them back to dollars = 1.05£ x $1.52/£ = $1.596
effective yield = (total return - initial investment) / initial investment = ($1.596 - $1.50) / $1.50 = 6.4%
