You plan to visit one of your friends living in Colorado, America in three months. You expect to incur the total cost of US$20,000 for lodging, meals, and transportation during your stay. As of today, the spot exchange rate is RM_____/ US$ and the three-month forward rate is RM_____/ US$ (please refer to Table 1 below for your given rates). You can buy the three-month call option on US$ with the exercise rate of RM4.3/ US$ for the premium of RM1 per US$. Assume that your expected future spot exchange rate is the same as the forward rate. The three-month interest rate is 3.2 percent per annum in Malaysia and 2 percent per annum in the United States.
TABLE1
| S(RM/USD) | F3m(RM/USD) |
| 4.195 | 4.245 |
In: Accounting
Enter the following transactions in the account of L. Linda: 2018 July 1 Started in business with RM 20,000 in the bank. 2 D. Rupert lent us RM 5,000 in cash. 3 Bought goods on credit from B. Brown RM 1,530 and I. Jess RM 4,162. 4 Sold goods for cash RM1,910. 6 Took RM200 of the cash and paid it into the bank. 8 Sold goods on credit to H. Rise RM1,530. 10 Sold goods on credit to P. Taylor RM341. 11 Bought goods on credit from B. Brown RM560. 12 H. Rise returned goods to us RM65 14 Sold goods on credit to G. Pate RM 535 and R. Sim RM 262. 15 We returned goods to B. Brown RM94. 17 Bought van on credit from Aberdeen Cars Ltd RM9,100. 18 Bought office furniture on credit from J. Winter Ltd RM1,800. 19 We returned goods to I. Jess RM130. 20 Bought goods for cash RM 770. 24 Goods sold for cash RM 110. 25 Paid money owing to B. Brown by cheque RM 1,924 26 Goods returned to us by G. Pate RM 34. 27 Returned some of office furniture costing RM180 to J. Winter Ltd. 28 L. Linda put a further RM2,500 into the business in the form of cash. 29 Paid Aberdeen Cars Ltd RM9,100 by cheque. 31 Bought office furniture for cash RM 365.
In: Accounting
We started off this class by looking at the data about Small Businesses to understand the importance of data to the success of the US economy and its significance in the world. Throughout the class, we examined the best management practices for small business managers and owners to increase the chance for success. The Small Business Administration (SBA) has offered some additional facts that may suggest several interesting ideas for the future of small business and its need for good management skills.
Below are some points from the reading to start you thinking.
19.3% of small businesses in the US are family owned
30% of family owned businesses survive the transition from first to second generation
12% of family owned businesses survive the transition from second to third generations
3% of family owned businesses are operated by the fourth generation
2 % of Millennials; 7.6% of generation X; and Baby Boomers at 8.3% are likely to be self-employed.
23% of new entrepreneurs in 2013 were millennials or younger (which was down from 35% in 1996).
The 1 year survival rate for new small businesses is 79.9%
The 5-year survival rate for new small businesses is 50%
The 10-year survival rate for new small businesses is 33%
Best Places to start a business in the US
using this information Evaluate the statistical data presented in the reading, and in the theme introduction and profile (type, owners, business form, etc,) a startup business that is likely to succeed and a business that is likely to exist after 10 years.
In: Operations Management
On July 9, 2018, Omar Co. purchased a machine for 260,000 SA from Saudi Machine Company (SMC). Omar gave SMC 7% note due in 120 days in payment for the machine. (5 Points)
What is the maturity date of the note?
How much interest will Omar pay to SMC on this note?
Pass the Journal entry for Notes Receivable transaction.
On October 16, 2018, Omar informs us that the company is unable to pay the note or interest?
What adjusting entry is required on December 2018?
On October 31, 2017, Aziz Company sells a truck that originally cost 140,000 SA for 95,000 SA cash. The truck was placed in service on January 1, 2012. It was depreciated using the straight-line method with an estimated salvage value of 28,000 and a useful life of 10 years. Record all the transactions? (2.5 points)
The trial balance before adjustment of XYZ Company reports the following balances: (2.5 points)
Dr. Cr.
Accounts receivable $100,000
Allowance for doubtful accounts $ 2,500
Sales (all on credit) 750,000
Sales returns and allowances 40,000
Instructions
Pass the journal entries for estimated bad debts assuming that doubtful debts accounts are estimated to be
(1) 6% of gross accounts receivable and
(2) 1% of net sales.
In: Accounting
According to life-cycle models of consumption, a $1000 tax cut would have the largest impact on consumption spending when
a. The tax cut is permanent b. The tax cut is temporary, and tax rates will steadily rise in subsequent years c. The tax cut is temporary, and tax rates will suddenly jump in subsequent years d. None of the above – A $1000 tax cut has the same impact on consumption spending regardless of whether it is temporary or permanent
7. An appreciation of the US dollar tends to a. Discourage Americans from traveling abroad b. Encourage exports of US goods c. Encourage foreigners to travel to the US d. Encourage imports into the US
8. If employers set efficiency wages that are above market wages, then a. Involuntary unemployment would disappear b. Real wage rigidity ceases to be an issue c. There could be permanent involuntary unemployment d. There could be permanent shortages of workers
9. The accelerator property of investment spending implies that a. Fluctuations in investment spending are more volatile than GDP fluctuations b. Fluctuations in investment spending are more stable than GDP fluctuations c. The IS curve is steeper than the LM curve d. The LM curve is steeper than the IS curve
In: Economics
Below shows the information for exchange rates, interest rates
and inflation rates in the US and
Germany. Answer the following questions
Current spot rate: $1.60/€
One-year forward rate: $1.58/€
Interest rate in the US: 2%
Interest rate in Germany:
4%
Inflation rate in the US:
2%
Inflation rate in Germany: 3%
(a) If you borrowed $1,000 for 1 year, how much money would you owe
at maturity?
(b) Find the 1-year forward exchange rate in $ per € that satisfies
IRP from the perspective of a customer
that borrowed $1000 traded for € at the spot and invested in
Germany.
(c) There is one profitable arbitrage at these prices. How to
conduct the covered interest arbitrage if you can
either borrow $1000 in the US or €1000 in Germany? What would be
the profit?
(d) Explain how the IRP will be restored as a result of covered
arbitrage activities.
(e) A fund manager uses the concepts of purchasing power parity
(PPP) to forecast spot exchange rates
using the financial information. Calculate the future euro spot
rate in dollar after one year that would be
forecast by relative PPP.
(Numbers should be rounded to at least 3 decimal places.
Please include currency symbols $, € in
your answer)
In: Finance
5) In late last year starting from November 2018, the stock markets in the Wall Street has shown an unexpected level of ups and downs (with almost wiping out 2018 gains in equity market) mainly attributed to the uncertainty caused by Trump’s Trade War policy with China and EU, falling oil prices, and other possible cutting govt. programs (in an effort to reduce budget deficit). In the process, the value of the $ has also shown a high degree of volatility against the Euro, the Yuan (Renminbi), yen and many other major currencies.
A) Given the current condition of the US economy, do you think US policy makers would prefer to see the $ rise in value, decline in value or stay at its current value? Discuss the advantages and disadvantages to the US economy at this time of a stronger vs. a weaker $. Frame your answer in terms of the current Aggregate Demand and Aggregate Supply situation of the US economy. 4pts
B) Draw an AS/AD diagram to illustrate your answers for Question A) above. Clearly label axes and the current position of AS & AD relative to full employment RGDP….also indicate any shifts that would occur if the exchange rate of the $ rose sharply against other major currencies 3pts
In: Economics
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In: Math
A potential drawback of Simple Random Sampling is:
Select one:
a. All possible combinations of individual sampling units can be
sampled
b. It may be difficult to assign random numbers to all possible
individual sampling units
c. The sample mean may be biased
d. The sample variance may be biased
e. Some individual sampling units may be left out
In: Statistics and Probability
Which of the following questions would be studied in the area of microeconomics?
-What determines the number of hours an individual works?
-Do interest rates affect net exports?
-Will an increase in government spending cause inflation?
-What portion of total spending comes from households?
-Does hosting the Olympics decrease the unemployment rate?
In: Economics