Answer:
Considering the allocate fixed cost, it would not be a good option.
It will generate a financial disadvantage of 22,950
Explanation:
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Fixed overhead; 38 x 1800 = 68,400
There is a portion of 35,550 fixed cost which is tracable to the real wheel assembly line thus, will be eliminated.
But 32,850 would not.
Considering this, it would not be a good option to stop the assembly line and purchase the component
Answer:
The correct answer is option (B).
Explanation:
According to the scenario, the given data are as follows:
Par value of bond = $10,000
Coupon rate Annual = 5%
So, Coupon rate semi annual = 2.5%
Inflation rate semi annual = 2%
So, we can calculate the coupon payment for six months by using following formula:
New par value of bonds after inflation = $10,000 + ( $10,000 × 2% ) = $10,200
So, Coupon payment = New par value × Coupon rate semi annual
= $10,200 × 2.5%
= $255
Answer:
B. $1.12
Explanation:
The computation of arbitrage trading profit is shown below:-
Euro Share price = £0.875
Spot rate R = £0.6366/$1.00
1 ADR Share price in US = $5.75
1 ADR = 5 share of shares
Now, The actual price of 1 ADR P1 = 5 × Euro Share price ÷ Share price in US
= 5 × £0.875 ÷ £0.6366
= $6.87
Therefore, The Arbitrage profit = Actual price - trading price
= Actual price - Price in US
= $6.87 - $5.75
= $1.12
Therefore for computing the arbitrage trading profit we simply applied the above formula.
Answer:
Prices go down, yield go up
Explanation:
As we know that there is an opposite relationship between the price of the bond and the yield that means if the creditworthiness comes in a doubt so it reduced the price of the bond and at the same time it increased the yield
So as per the given situation as the investor doubt the borrower creditworthiness so the price would fall and yield would go up
hence, the same is to be considered
Answer: risk
Explanation: 100% satisfaction guarantee is a statement that if a customer of a product (or service) is not satisfied with the item purchased, then the producer will offer a full refund back to the customer. In this case REI allows this option for a period of up to 1 year after the sale was made.
REI utilises this option in an effort to reduce costs attributed to risk. For customers, this is a powerful tool as they are allowed to try the product, while knowing that if they don't like it then they can return it for a full refund. For REI, it increases customer trust as it allows customers to believe that the product is worth the sales price. It also reduces risk as REI is able to test the product out to actual customers and get a feel for if they like it, and what can be improved if needed.
