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Daniel [21]
1 year ago
5

If a bushel of wheat costs $6.40 in the US and costs 40 pesos in Mexico and the nominal exchange rate is 10 pesos per dollar, th

en the real exchange from the US perspective is 1.60. The US will... a. Import more bushels of wheat from Mexico b. Export more bushels of wheat to Mexicoc. No change in exports or importsd. None of these answers are correct
Business
1 answer:
Akimi4 [234]1 year ago
4 0

Answer:

a. Import more bushels of wheat from Mexico

Explanation:

When the real exchange rate is higher than one, a country is likely to import more, since goods are cheaper in the other country than locally. In this example, a bushel of wheat, in the US, costs $6.40, while in Mexico, the same product costs:

P=40\ pesos *\frac{\$1}{10\ pesos}\\ P=\$4

Therefore, the US will Import more bushels of wheat from Mexico.

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Suppose a firm is producing in the long run. When it produces 4,000 units of output, its total cost is $8,000. When it produces
Scilla [17]

Answer:

increasing then decreasing

Explanation:

production level            total cost             average total cost

4,000                               $8,000                    $2.00

4,200                               $8,200                     $1.95

4,400                               $8,800                    $2.00

Returns to scale measure the change in productivity, or how much input is needed to produce a unit of output.

  • increasing returns to scale: output increases in a greater proportion than inputs
  • constant returns to scale: output increases in the same proportion as inputs
  • decreasing returns to scale: output increases in a lower proportion than inputs

Since first the average total cost decreased, total output increased in a greater proportion than inputs ⇒ increasing returns of scale. But then the situation reversed and total output increased in a lower proportion than inputs ⇒ decreasing returns of scale.

4 0
1 year ago
Spartan Corporation, a U.S. corporation, reported $2 million of pretax income from its business operations in Spartania, which w
AVprozaik [17]

Answer:

A. = (15% X $2M) + (21% X $2M) = $720,000. Since there is no mechanism for mitigating double taxation, the branch profit will be taxed on the to tax rate of 15% and 21% which is $300,000 and $420,000.

B. The total tax for $2m branch profit if US corporations can remove foreign based profit from US taxation will be just the 15% x $2m = $300,000.

C.If they are allowed to take deductions for foreign income taxes, the total tax on the $2m branch profit will be (21% -15%) x $2m = $120,000.

Explanation:

D.1. If credit are allowed for foreign income tax paid, total tax will be ($2m - $300,000 been foreign tax paid) x 21% = $357,000

D.2.

If the charge foreign income taxes at 30% and US corporations can claim refundable credit for foreign income tax paid on foreign source income = ($2m - $300,000 been the foreign income tax paid) = $1 700,000 x 30% = $510,000

6 0
1 year ago
TH Manufacturers expects to generate cash flows of $129,600 for the next two years. At the end of the two years the business wil
arsen [322]

Answer:

Vo  = <u>C1  </u>    +        <u>C2 + V2</u>

        1 + k              (1 + K)2

Vo = <u>$129,600  </u> +   <u>$129,600 + $3,200,000</u>

        1 + 0.14            (1 + 0.14)2

Vo = $113,684.21  + $2,562,019.08

Vo = $2,675,703.29

The correct answer is C

Explanation:  

The current value of the business equals cashflow in year 1 divided by 1 + K plus the aggregate of cashflow and sales value in year 2 divided by 1 + k raised to power 2.

7 0
1 year ago
Today you deposited $15,000 into a 5-year CD that will pay 6 percent interest. How much will you withdraw from the account in 5
Soloha48 [4]

Answer:

The answer is 20073.38

Explanation:

FV = A * (1+ i)^n

FV = $15,000 * (1.06)^5= 20073.38

20073.38 will be withdrawn from the account in 5 years

4 0
2 years ago
The account receivable turnover measures: Multiple Choice All of the options are correct. How often, on average, receivables are
denpristay [2]

Answer:

How often, on average, receivables are received and collected during the period

Explanation:

An account receivable is an accounting entry that measures the amount which a firm or organization will receive soon that is not paid yet by the customers. Likewise, account receivable turnover measures the average amount received and collected in a particular period. It helps to understand the average receivable amount and what must be changed to improve it.

6 0
1 year ago
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