Answer:
Forecast exchange rate = $2.29(Approx)
Explanation:
Given:
Exchange rate = $1.95
Inflation rate difference = 2.6% - 20% = 17.4%
Computation:
Forecast exchange rate = 1.95 / (1-17.4%)
Forecast exchange rate = $2.29(Approx)
Answer:
$12,000
Explanation:
Margin of safety = Current sales level - Break even point
=(8,000 ×12) - (7,000 × 12)
= 96,000 - 84,000
= $12,000
Answer:
True
Explanation:
An organization that makes use of multisegment marketing approach is undoubtedly a big company that have established name for itself. This means that, the organization or company is well known and that it is an household name in the industry. Therefore, such company has the capacity of using multisegment marketing approach.
But a small company will only make use of one pricing method, this is to attract people to its products. And avoid competing with the established organizations. So, in the process, creating name for itself.
This is a rare occurence in the market world and can lead to malfuunctions. Since the price level has dropped, we have that the catalogued items are overpriced with respect to the income and other basic goods. Hence, the demand for them will drop. In response, companies will also reduce their output.
Also, we have that the true rate of output and natural rate of output difference is proportional to the diffeerence between price levels. Since the actual price level is lower than the expected one, we have that the rate of output will fall below the natural rate of output for a while.
Answer:
The invoice price of the bond will be $100,127.88
Explanation:
Bonds are nothing but the debt instrument which a company uses to raise capital from the general public, these bonds can be of both short and long term period.
In the question it is given that bond has a coupon period of 182 days which means the bond is of short term period. Coupon rate of 7% means the bond gives the interest of 7% to its holder semiannually every year on January 15 and July 15.
It is given that the ask price for the bond on January 30 is 100.125 percent on par value of the bond which we are assuming to be $1000, which means the ask price is
$1000 X 100.125 = $100,125 ( ASK PRICE)
now we have to calculate the interest, remember the semiannually payment of interest has already been made on January 15 which means we have to find interest for only 15 days which will be taken out on par value
INTEREST = $1000 x 7% x 15 / 30
= $1000 x .07 x 1/ 2
= $35
INVOICE PRICE = INTEREST X \frac{TOTAL \: NUMBER \: OF \: DAYS}{COUPON \: PERIOD} + Ask price
= $35 X 15 / 182
= $2.884
Now adding this amount in to ask price
$100,125 + $2.884
= $100,127.88 ( INVOICE PRICE)
