Benjamin, Inc., operates an export/import business. The company has considerable dealings with companies in the country of Camerrand. The denomination of all transactions with these companies is alaries (AL), the Camerrand currency. During 2017, Benjamin acquires 22,000 widgets at a price of 8 alaries per widget. It will pay for them when it sells them. Currency exchange rates for 1 AL are as follows:
| September 1, 2017 | $ | 0.48 | |
| December 1, 2017 | 0.42 | ||
| December 31, 2017 | 0.50 | ||
| March 1, 2018 | 0.43 | ||
(Input all amounts as positive values.)
Effect of Exchange Rate Fluctuations
a.2017
2018
b.2017
c.2017
2018
In: Accounting
1.A pharmaceutical company is testing their new nicotine patch. They randomly assign 100 volunteers to use the patch and finding that 37 had quit smoking after 8 weeks. Compute the 96% confidence interval. You DO need to check CLT here.
2.For # 32 .In the United States, the population mean height for 3-year-old boys is 38 inches. Suppose a random sample of 30 non-U.S. 3-year-old boys showed a sample mean of 37.2 inches with a standard deviation of 3 inches. The boys were independently sampled. Assume that heights are Normally distributed in the population. Determine whether the population mean for non-U.S. boys is significantly different from the U.S. population mean. Use a significance level of 1%. assume that CLT applies.
The pharmaceutical company in #32 repeats their test, this time randomly assigning 125 volunteers to use the patch and finding that 49 had quit smoking after 8 weeks. Compute the 98% confidence interval, and use it to determine if you can support the company’s claim that over half of people on the patch quit smoking after 8 weeks. You do NOT need to check CLT here.
In: Statistics and Probability
Sandrine Machinery is a Swiss multinational manufacturing company. Currently, Sandrine's financial planners are considering undertaking a 1-year project in the United States. The project's expected dollar-denominated cash flows consist of an initial investment of $2000 and a cash inflow the following year of $2400. Sandrine estimates that its risk-adjusted cost of capital is 15%. Currently, 1 U.S. dollar will buy 0.73 Swiss franc. In addition, 1-year risk-free securities in the United States are yielding 6%, while similar securities in Switzerland are yielding 3%. Do not round intermediate calculations.
If this project was instead undertaken by a similar U.S.-based company with the same risk-adjusted cost of capital, what would be the net present value and rate of return generated by this project? Round your answers to two decimal places.
NPV = $ _____
Rate of return = _____
What is the expected forward exchange rate 1 year from now? Round your answer to two decimal places.
_____ SF per U.S. $
If Sandrine undertakes the project, what is the net present value and rate of return of the project for Sandrine? Do not round intermediate calculations. Round your answers to two decimal places.
NPV = ____Swiss Francs
Rate of return = ____%
In: Finance
Sandrine Machinery is a Swiss multinational manufacturing company. Currently, Sandrine's financial planners are considering undertaking a 1-year project in the United States. The project's expected dollar-denominated cash flows consist of an initial investment of $2000 and a cash inflow the following year of $2400. Sandrine estimates that its risk-adjusted cost of capital is 13%. Currently, 1 U.S. dollar will buy 0.73 Swiss franc. In addition, 1-year risk-free securities in the United States are yielding 6.75%, while similar securities in Switzerland are yielding 3%.
If this project was instead undertaken by a similar U.S.-based company with the same risk-adjusted cost of capital, what would be the net present value and rate of return generated by this project? Round your answers to two decimal places.
NPV = $
Rate of return = %
What is the expected forward exchange rate 1 year from now? Round your answer to two decimal places.
SF per U.S. $
If Sandrine undertakes the project, what is the net present value and rate of return of the project for Sandrine? Do not round intermediate calculations. Round your answers to two decimal places.
NPV = Swiss Francs
Rate of return = %
In: Finance
On 3/31/2020, Company ABC released its quarterly report, showing
the sales in the first quarter had tumbled 30% as pandemic hit.
However, the stock price for company ABC rose by 3% (instead of
fell by 3%) after the report is released. Does this mean a failure
of the Market Efficient Theory? please write equations and solve
step by step
In: Finance
Early the following year (2020), the Company is told that one of its customers declared bankruptcy & cannot pay the $8,000 it owes. The $8,000 was part of the Company’s Accounts Receivable balance at December 31, 2019 (see preceding fact pattern immediately above). Prepare the adjusting journal entry to write off the $8,000 receivable (Remember, the Company uses the Allowance Method).
In: Accounting
A company issued financial statements for the year ended March 31, 2020. Three months later, management discovered that net income was overstated (too high) by $10,000.
1. There was no fraud involved.
2. The accountants at the company were all competent.
What could have caused the error?
Please answer in two paragraphs with clear explanation and good reasoning.
In: Accounting
A 59 year-old calendar year individual taxpayer purchased an annuity from an insurance company for $100,000 in 2019. The terms of the annuity were that the company would pay him $5,000 a year to T for the rest of T’s life. How much income will he include in his personal income tax return as a result of receiving the $5,000 payment
in 2020? _____________
In 2050? ______________
In: Accounting
The probability that an 80-year-old male in the U.S. will die within one year is approximately 0.069941. If an insurance company sells a one-year, $12,000 life insurance policy to such a person for $425, what is the company's expectation? (Round your answer to two decimal places.)
In: Economics
In: Economics