Answer:
[tex]\boxed {\boxed {\sf A. \ Local \ community \ college}}[/tex]
Explanation:
Local community colleges are a great option because they provide a foundation of education. They offer courses that are equivalent to a four-year college/university's, but at much lower costs. This type of education allows you to earn a 2 year Associate's degree.
You can decide your path after, but many people choose to transfer to another four-year college/university. When they transfer, the 2 years at the community college counts as 2 years at the chosen institution, so they enter as a junior.
Trade schools and training programs offer valuable education, but typically not Associate's degrees.
So, the best answer is choice A. Local community college
Answer:
A local community college.
Explanation:
What is the trial balance used?
a. It is a financial statment.
b. It doesn't contribute to the accounting cycle.
c. It records balance of a balance sheet.
d. It records balance of accounts.
Answer:
c
Explanation:
The Bildge Trust is a simple trust. Crawford is its sole beneficiary. In the current year, the trust earns $11,025 in taxable interest and $27,563 in tax-exempt interest. In addition, the trust recognizes a $1,575 long-term capital gain. The trustee charges a fee of $6,891 for the year.
a. Compute trust accounting income, where the trust agreement allocates fees andcapital gains to corpus.
b. Same as (a), except that fees are allocated to income.
Answer:
b
Explanation:
Sandhill, Inc., is launching a new store in a shopping mall in Houston. The annual revenue of the store depends on the weather conditions in the summer in Houston. The annual revenue will be $252,000 in a sizzling summer, with a probability of 0.3, $61,000 in a cool summer with a probability of 0.2, and $170,500 in a normal summer with a probability of 0.5.
What is the expected annual revenue for the store?Expected annual revenue= $
Answer:
$173,050
Explanation:
Expected revenue = 0.3*$252,000 + 0.2*$61,000 + 0.5*$170,500
Expected revenue = $75600 + $12200 + $85250
Expected revenue = $173,050
So, the expected annual revenue for the store is $173,050
Excerpts from Sydner Corporation's most recent balance sheet appear below: Year 2Year 1 Current assets: Cash$ 142$ 161 Accounts receivable, net212232 Inventory244203 Prepaid expenses1111 Total current assets$ 609$ 607 Total current liabilities$ 364$ 335 Sales on account in Year 2 amounted to $1,415 and the cost of goods sold was $915. The current ratio at the end of Year 2 is closest to:
Answer: 1.67
Explanation:
Current ratio is calculated by dividing the Current Assets by Current liabilities and measures to what extent current assets can be used to cover current liabilities if need be.
Current Liabilities year 2= Current Assets/ Current Liabilities
= 609/364
= 1.67
Rachel's Designs has 1,900 shares of 6%, $50 par value cumulative preferred stock issued at the beginning of 2019. All remaining shares are common stock. Due to cash flow difficulties, the company was not able to pay dividends in 2019 or 2020. The company plans to pay total dividends of $19,000 in 2021. How much of the $19,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders
Answer:
Preferred Dividend = $17,100Common Dividend = $1,900Explanation:
Cumulative preferred stockholders will always have their dividends paid to them eventually because the dividends will accrue for years where they went unpaid.
This means that in 2021 they will be paid their dividends for the years 2019, 2020 and 2021.
Yearly preferred dividend = 1,900 * 6% * 50
= $5,700
Preferred dividends in 2021 = 5,700 * 3
= $17,100
Common stockholders would get = 19,000 - 17,100
= $1,900
Assume the country of Technologia invests in an online system that efficiently matches job-seekers with employers and significantly reduces the time required for job searches.
A. Which type of unemployment will Technologia's investment affect?
B. Will unemployment increase or decrease?
C. Given the change in unemployment from part b. what will happen to the natural rate of unemployment in Technologia? Explain.
D. Given your answer to part b. what will happen to real GDP in Technologia? Explain.
Answer:
Technologia's online system helps to increase the employment of the people in Technologia.
Explanation:
A. Technologia's investment in the online system to help the match the job seekers with the employers will greatly affect the frictional unemployment.
B. With the help of this online system, it will help to decrease the unemployment in Technologia.
C. The natural unemployment will reduce in Technologia as the natural unemployment includes the frictional unemployment as well as the structural unemployment. Here since the frictional unemployment will decrease, the natural unemployment also decreases.
D. The real gross domestic product or the GDP will increase. Te real GDP is the country's total goods and service produces. When unemployment reduces, the production of various goods and service will increases as now people can afford to buy those goods an services. Hence the real GDP increases.
The following information should be considered:
A. Technologia's investment in the online system to help the match the job seekers with the employers will greatly affect the frictional unemployment.
B. With the help of this online system, it will help to decrease the unemployment in Technologia. Also, the job search time is reduced and job matching is easy,
C. The natural unemployment will decrease in Technologia as the natural unemployment includes the frictional unemployment as well as the structural unemployment. Here since the frictional unemployment will decrease, the natural unemployment also decreases.
D. Real GDP should increase because more workers can be employed so production is increased.
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Rorry Company uses a job cost system. Overhead was applied to production using a rate of 78 percent of direct labor costs. What is the journal entry when direct labor costs are $18,000
Answer:
Dr Work in Process Inventory for $14,040
Cr Manufacturing Overhead for $14,040
Explanation:
Based on the information given we were told that the company applied Overhead to production using a rate of 78% of direct labor costs which means that the journal entry when direct labor costs are the amount of $18,000 will be :
Dr Work in Process Inventory for $14,040
Cr Manufacturing Overhead for $14,040
(78%*18,000)
Onofkp411 Corporation has a time contraint on one of its special machines. The company makes three products that use this machine. Data concerning those products appear below: Magnifico Bellissimo Lovely
Selling price per unit $ 335.18 $ 228.46 $ 199.21
Variable cost per unit $ 259.26 $ 173.08 $ 159.61
Minutes on the constraint 7.50 4.30 5.50
Assume that sufficient time is available on the constrained machine to satisfy demand for all but the least profitable product Q) Up to how much should Onofkp 411 be willing to pay to acquire more of the constrained resource (Round your intermediate calculations to 2 decimal places.)
a) $75.80 per minute
b) $14.17 per unit
c) $39.48 per unit
d) $774 per minute
Answer: $7.20 per minute
Explanation:
Find out the profitability of each product as Contribution Margin per minute.
Magnifico
Contribution margin per minute = (Selling price - Variable cost) / minutes on the constraint
= (335.18 - 259.26) / 7.5
= $10.12 per minute
Bellissimo
= (228.46 - 173.08) / 4.3
= $12.88 per minute
Lovely
= (199.21 - 159.61) / 5.5
= $7.20 per minute
Their least profitable product is $7.20 per minute.
The machine does not have sufficient time to satisfy the needs of Lovely so they will have to pay more to acquire more of the resource but they should not pay anything more than $7.20 per minute as this is their contribution margin for the product. and anything more would result in a loss.
Options are most probably for another variant of the question.
Data related to the inventories of Costco Medical Supply are presented below: Surgical Surgical Rehab Rehab Equipment Supplies Equipment Supplies Selling price $ 260 $ 100 $ 340 $ 165 Cost 170 90 250 162 Costs to sell 30 15 25 10 In applying the lower of cost or net realizable value rule on an individual item basis, the inventory of surgical equipment would be valued at: (do not include $ in your answer)
Answer:
the inventory that should be valued is $170
Explanation:
The computation of the inventory of surgical equipment is shown below:
Costs $170
Net Realizable Value:
Selling price $260
Less: Costs to sell -$30 $230
Lower of cost or net realizable value $170
As we know that the inventory should be valued at cost or net realizable value whichever is lower
So, the inventory that should be valued is $170
A responsibility center in which the department manager is responsible for costs, revenues, and assets for a department is called:
a. a cost center
b. a profit center
c. an operating center
d. an investment center
Answer:
d. an investment center
Explanation:
The investment center is the center that has the department manager responsibility towards cost, revenues, and the assets for the particular department.
Mainly the divisional manager responsible for the revenue and the cost
In addition to this, they also make the decisions which investment should be considered that contains high returns
Therefore the option d is correct
During its first year of operations, Riverbed Corp had these transactions pertaining to its common stock. Jan. 10 Issued 26,300 shares for cash at $4 per share. July 1 Issued 56,500 shares for cash at $7 per share. (a) Journalize the transactions, assuming that the common stock has a par value of $4 per share. (b) Journalize the transactions, assuming that the common stock is no-par with a stated value of $1 per share.
Answer and Explanation:
The journal entries are shown below:
1.
On Jan.10
Cash (26,300 shares × $4) $105,200
To Common stock $105,200
(Being the issuance of the common stock for cash is recorded)
On July 1
Cash (56,500 shares × $7) $395,500
To Common stock (56,500 shares × $4) $226,000
To Paid-in Capital in Excess of Par Value $169,500
(Being the issuance of the common stock for cash is recorded)
2.
On Jan.10
Cash (26,300 shares × $4) $105,200
To Common stock (26,300 shares × $1) $26,300
To Paid-in Capital in Excess of Stated Value $78,900
(Being the issuance of the common stock for cash is recorded)
On July 1
Cash (56,500 shares × $7) $395,500
To Common stock (56,500 shares × $1) $56,500
To Paid-in Capital in Excess of Stated Value $339,000
(Being the issuance of the common stock for cash is recorded)
Ben sells stock (adjusted basis of $25,000) to his son, Ray, for its fair market value of $15,000. Ray sells the stock to his neighbor, Trish, for $26,000. Which of the following statements are most accurate?a. Ben’s recognized loss is $0 and Ray’s recognized gain is $1,000.b. Ben’s recognized loss is $10,000 and Ray’s recognized gain is $10,000.c. Ben’s recognized loss is $10,000 and Trish’s recognized gain is $1,000.d. Ray’s recognized gain is $11,000 and Trish’s basis is $26,000.e. None of the above
Answer:
Ray’s recognized gain = $11,000
Trish’s basis = $26,000.
Option "D" is the correct answer.
Explanation:
Given:
Adjusted value of stock = $25,000
Market vale = $15,000
Sales price = $26,000
Find:
Ray’s recognized gain
Trish’s basis
Computation:
Ray’s recognized gain = Sales price - Market vale
Ray’s recognized gain = $26,000 - $15,000
Ray’s recognized gain = $11,000
Trish’s basis = $26,000.
Vital Silence Corp. has just issued a 30-year callable, convertible bond with a coupon rate of 6.4 percent and annual coupon payments. The bond has a conversion price of $93.40. The company's stock is selling for $28.60 per share. The owner of the bond will be forced to convert if the bond's conversion value is ever greater than or equal to $1,140. The required return on an otherwise identical nonconvertible bond is 7.4 percent. Assume a par value of $1,000.
a. What is the minimum value of the bond?
b. If the stock price were to grow by 10.8 percent per year forever, how long would it take for the bond's conversion value to exceed $1,140?
Answer:
a. $880.74
b. 13 years
Explanation:
a. Conversion ratio = Current Value of bond / Conversion price = 1,000 / 93.4 = 10.71
Conversion price of bond = 10.71 × 28.60 = $306.31
Coupon = Par value of bond * Coupon rate = $1,000 * 6.4% = $64
Present value of straight debt is calculated below:
Present Value = $64 × [1-(1+7.4%)^-30 / 7.4%] + [$1,000 / (1+7.4%)^30]
= $64*11.93 + $117.46
= $763.28 + $117.46
= $880.74 .
Therefore, the minimum value of bond is $880.74
b. Conversion ratio = 10.71
Current stock price = $28.6
Suppose number of year the stock will take to reach above $1,140 is t.
Conversion value = Current stock price * Conversion ratio*(1+10.8%)^t
$1,140 = $28.6 * 10.71 * (1.108)^t
(1.108)^t = 3.7218
t = 12.8145 year.
t = 13 years
Brief Exercise 169 On December 1, Maisins Furniture Corporation borrowed $10,000 on a 90-day, 6% note. Prepare the entries to record the issuance of the note, the accrual of interest at year end, and the payment of the note. (Credit account titles are automatically indented wh the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.)
Answer:
1. Dr Cash $ 10,000
Cr Notes Payable $ 10,000
2. Dr Interest Expense $75
Cr Interest Payable $75
3. Dr Notes Payable $ 10,000
Dr Interest Expense $ 225
Dr Interest Payable $ 75
Cr Cash $ 10,300
Explanation:
Preparation of the entries to record the issuance of the note, the accrual of interest at year end, and the payment of the note
1. Preparation of the entries to record the issuance of the note
Dr Cash $ 10,000
Cr Notes Payable $ 10,000
(Being record of issuance of the note )
2. Preparation of the entries to record the accrual of interest
Dr Interest Expense $75
($10,000*9%*30 days/360 days)
Cr Interest Payable $75
(Being Interest accrued for 30 days)
3. Preparation of the entries to record the payment of the note
Dr Notes Payable $ $10,000
Dr Interest Expense $ 225 ($10,000*9%*90 days/360days)
Dr Interest Payable $ 75
($10,000*9%*30 days/360 days)
Cr Cash $ 10,300
($10,000+$225+$75)
(Being to record payment of the note)
Please choose one of following answers that are in quote
What is the opportunity cost in this scenario?
Harry has been very busy at work for the past two weeks. He has been working weekends too. Finally, he is going to get a weekend off. "Originally, he planned to paint his apartment that weekend." "He also considered going fishing for the weekend." "But then his parents called and asked him to come for dinner because it has been a while since they have seen each other."
"Later on, his friend Theo informed him about a surprise birthday party for another friend." Theo plans to reserve a room at a restaurant for the celebration, with the cost to reserve the room split between Theo, Harry, and three other friends.
Now Harry is confused about what he should do over the weekend. He decides that, for him, the most important commitments are going over to his parent's house and attending his friend's birthday party. In the end, Harry decides to see his parents.
Answer:
it would be better to go the his parents house so it would be cheaper, probably around $10
Explanation:
A public franchise is a right granted Group of answer choices to one firm by another firm; for example, McDonald's Corporation grants restaurant owners a franchise to make its hamburgers. to a firm by government that prevents other firms from producing the same product or service. to a cooperative of buyers that allows the group to purchase goods at wholesale prices. by government that enables a person to engage in arbitrage.
Answer: to a firm by government that prevents other firms from producing the same product or service
Explanation:
A public franchise is a right granted to a firm by government that prevents other firms from producing the same product or service.
This is done by the government in a situation whereby the government doesn't want a competition for the firm or doesn't want other firms to sell that particular good.
For example, if a particular firm comes up with a drug that can cure HIV/AIDS, the government may grant such firm a public franchise.
Consider the three theories of the upward slope of the short-run aggregate-supply curve. According to the sticky-wage theory, the economy is in a recession because the price level has declined so that real wages are too . True or False: According to the sticky-price theory, the economy is in a recession because people expect prices to rise quickly in a recession. True False According to the misperceptions theory, the economy is in a recession when the price level is what was expected.
Answer:
According to the sticky-wage theory, the economy is in a recession because the price level has declined so that real wages are too
⇒HIGH. According to this theory, the increase of real wages will result in lower production levels and lower employment.
According to the sticky-price theory, the economy is in a recession because people expect prices to rise quickly in a recession.
⇒TRUE. The sticky price theory is based on the concept that prices will not change quickly enough to adjust to a new optimal equilibrium level.
According to the misperceptions theory, the economy is in a recession when the price level is what was expected.
⇒FALSE. According to this theory if the price level decreases, suppliers will reduce output levels resulting in a recession.
The stock of Stock M has a beta of 1.48 and an expected return of 12.50 percent. The risk-free rate of return is 5 percent. What is the expected return on the market?
Answer:
10.07%
Explanation:
Calculation for the Expected return
Using this formula
Expected return =(Expected return-Risk-free rate)/Beta+Risk-free rate
Let plug in the formula
Expected return=(0.125 –0.05)/1.48 + 0.05
Expected return=0.075/1.48+0.05
Expected return=0.05068+0.05
Expected return=0.1007*100
Expected return=10.07%
Therefore the expected return on the market will be 10.07%
RJ Corporation has provided the following information about one of its inventory items:
Date Transaction
1/1 Beginning Inventory
6/6 Purchase
9/10 Purchase
11/15 Purchase
During the year, RJ sold 3,000 units.
Number of Units 400 800 800 1,200 800
Cost per Unit $3,200 $3,600 $4,000 $4,200
What was ending inventory using the LIFO cost flow assumption under a periodic inventory system?
a. $880,000.
b. $640,000
c. $770,000.
d. $840,000
Answer:
b. $640,000
Explanation:
The computation of the ending inventory using the periodic inventory system is as follows:
But before that the ending inventory units is
= Beginning inventory units + purchased units - sold units
= 400 + 800 + 1,200 + 800 - 3,000
= 200 units
Now the ending inventory is
= 200 units × $3,200
= $640,000
hence, the ending inventory using the periodic inventory system is $640,000
Therefore the correct option is B
Rock Bottom Gold Company recently repurchased 7 million shares of its common stock for $47 per share. The intent of the repurchase was to increase earnings per share to be more in line with competitors. Required: 1. Determine the impact of the stock repurchase on assets, liabilities, and stockholders' equity. (Enter your answers in whole dollars not in millions (i.e., 1,000,000 not 1.0). Negative amounts should be indicated by a minus sign.)
The impact includes Assets = -$32,90,00,000, Liabilities = No Effect and Stockholder's Equity = -$32,90,00,000.
If the stock is repurchased, the cash will be paid. Thus, the assets would be decreased.
Also for the stock repurchase, the stockholder's equity will be decreased consequently.
Assets = Cash (7,000,000*$47)
Assets = -$329,000,000
Thus, the assets will decrease by $329,000,000.
Liabilities = No Effect
Thus, the liabilities will have no impact for the transaction.
Stockholder's Equity = -$329,000,000
Thus, the stockholder's equity will be decreased by $329,000,000.
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If you have done everything correctly, you might realize that stagflation creates a dilemma for the Fed. Why? Choose one or more: A. If the Fed wants to reduce unemployment, it must be willing to accept more inflation. B. If the Fed wants to reduce inflation, it must be willing to accept higher unemployment. C. If the Fed wants to reduce unemployment, it must be willing to accept less inflation. D. If the Fed wants to reduce inflation, it must be willing to accept lower unemployment.
Answer:
A. If the Fed wants to reduce unemployment, it must be willing to accept more inflation.
B. If the Fed wants to reduce inflation, it must be willing to accept higher unemployment.
Explanation:
Stagflation is a situation in which there is a shift of the supply curve to the left that results in a high inflation due to which there is a high unemployement. Now if the fed wants to reduce the inflation so the demand would decline due to which the unemployment rises
Therefore A and B are correct
And C and D are incorrect
Answer:
The Federal Reserve seeks to control inflation by influencing interest rates. When inflation is too high, the Federal Reserve typically raises interest rates to slow the economy and bring inflation down.
Explanation:
What are the "flows" within a supply chain, and why are they important?
Answer:
Supply chain management is the coordination, management and strategy that drives the flow of data, information, resources and materials to deliver the best product and service to all stakeholders in the process of converting raw goods to a salable product and delivering it to the ultimate customer. There are three main flows of supply chain management: the product flow, the information flow, and the finances flow. The product flow involves the movement of goods from a supplier to a customer. This supply chain management flow also concerns customer returns and service needs.
Explanation:
Define the three economic effects of oligopoly
Answer:
Some of the oligopoly effects are discussed as follows:
i. Restriction on output:
Implies that oligopoly results in small output and high prices as compared to other market structures, such as perfect competition.
ii. Price exceeds average costs:Implies that under oligopoly, there are restrictions on entry of new organizations. Thus, organizations charge prices more than the average costs. Therefore, consumers have to pay more in case of oligopoly market.
iii. Lower Efficiency:
Leads to non-optimum levels of output. This is because the output produced under oligopoly depends on the market share held by the organization. Thus, the oligopoly organizations fail to build the optimum scales of economies and achieve optimum output.
iv. Selling Costs:
Refer to high promotional costs. The oligopolists engage in high promotion tasks to take the share of its rivals. Thus, the resources are wasted in form of high selling costs which do not add to the satisfaction of customers.
Apart from aforementioned points, oligopoly shows the poor performance from various other angles. From the point of economic welfare, it fails to satisfy customers since the price charged is very high, even more than average costs. In addition, sometimes oligopolists may face wasteful fluctuations in output as the output is not determined optimally.
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The airline companies often change their flight prices over time. Assume Mary is planning her trip to New York City during the Christmas holiday. When she first checked the price in September, the ticket price was $300 round trip per person. However, when she checked the price again in early December, she noticed the price increased to $600 round trip per person for the same flight. This is an example of _______________.
Answer:
Third degree price discrimination
Explanation:
Price discrimination is when the same product is sold at different prices to customers in different markets
types of price discrimination
1. first degree price discrimination : here sellers charge each consumer at their willingness to pay in order to eliminate consumer surplus.
2. second degree price discrimination : here firms offer different prices depending on the quantity purchased. e.g. giving discounts for bulk purchases.
3, third degree price discrimination : firms charge different prices to different groups of customers. e.g. having a certain price for senior citizens, students
QS 23-11 Selection of sales mix LO P3 Excel Memory Company can sell all units of computer memory X and Y that it can produce, but it has limited production capacity. It can produce two units of X per hour or three units of Y per hour, and it has 4,700 production hours available. Contribution margin is $6 for product X and $5 for product Y. 1. Calculate contribution margin per production hour. 2. What is the most profitable sales mix for this Company
Answer:
Contribution margin per production hour
Product X = $12
Product Y = $15
Explanation:
Part 1
Contribution margin per production hour
Contribution margin per production hour = Contribution ÷ Time to produce one product
Therefore,
Product X = $6 ÷ 0.5
= $12
Product Y = $5 ÷ 0.33
= $15
Part 2
The Demand Units of Product X and Product Y are missing so the calculation of profitable sales mix is impossible.
This mix would have been calculated by :
Manufacturing all the units of Product Y since Y has the highest contribution margin per production hour (demand for Y × hours required per unit)With the remainder of hours out of 4,700 after producing all of Product Y demand, we would then produce Product X.
A company purchased a weaving machine for $273,400. The machine has a useful life of 8 years and a residual value of $15,000. It is estimated that the machine could produce 760,000 bolts of woven fabric over its useful life. In the first year, 110,000 bolts were produced. In the second year, production increased to 114,000 units. Using the units-of-production method, what is the amount of depreciation expense that should be recorded for the second year
Answer:
Annual depreciation= $38,760
Explanation:
To calculate the depreciation expense, we need to use the following formula:
Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced
Annual depreciation= [(273,400 - 15,000)/760,000]*114,000
Annual depreciation= $38,760
Interest rates on a loan provide what key information?
A. Information about the additional money you will have to pay back to the lender.
B. Information about the credit history of the lender.
C. Information about the length of the loan.
D. Information about the total payment due each month.
Answer:
d
Explanation:
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Canova Corporation adopted the dollar-value LIFO retail method on January 1, 2021. On that date, the cost of the inventory on hand was $18,000 and its retail value was $24,000. Information for 2021 and 2022 is as follows: Ending Inventory at Retail Retail Price Index Cost-to-Retail Percentage Date 12/31/2021 $ 39,000 1.30 77 % 12/31/2022 $ 50,000 1.60 80 % Required: 1. What is the cost-to-retail percentage for the inventory on hand at 1/1/2021
Answer: 75%
Explanation:
Cost to retail = Cost price/ Retail price * 100
On 1/1/2021, Cost to Retail is;
= 18,000/24,000 * 100%
= 75%
The following is a TRUE statement about inventory within a continuous review system: A. When holding costs increase, Economic Order Quantity decreases B. When service level decreases, Economic Order Quantity decreases C. When demand increases, Economic Order Quantity decreases D. When ordering or setup costs increase, Economic Order Quantity decreases E. When holding costs decrease, Economic Order Quantity decreases
Answer:
A. When holding costs increase, Economic Order Quantity decreases
Explanation:
The answer will be attain through the following illustration
Suppose, Demand = 1000 units, Ordering cost = $10, Holding cost = $0.50
Economic Order Quantity = √2 * 1000 Units * $10 / $0.50
Economic Order Quantity = √40000
Economic Order Quantity= 200 units
Assume, there is increase of holding cost to $1.50
Economic Order Quantity = √2 * 1000 Units * $10 / $1.50
Economic Order Quantity = √13333
Economic Order Quantity = 116 unit
Therefore, when holding costs increase, Economic Order Quantity decreases.
Inventory is termed as the stock of the goods and services available for the consumption of the consumers or the customers. It is referred as the management of the goods and services as per the demand of the customers in the market.
The true statement about inventory within a continuous review system is A. When holding costs increase, Economic Order Quantity decreases.
This can be illustrated with the specific example as below:
Let, Demand = 1000 units, Ordering cost = $10, Holding cost = $0.50
Economic Order Quantity = [tex]\sqrt{2} \times 1000 \:Units \times\frac{\$10 }{\$0.50}[/tex]
Economic Order Quantity = √40000
Economic Order Quantity= 200 units
Assume that there has been an increase in holding cost to $1.50
Economic Order Quantity = [tex]\sqrt[]{2} \times 1000 \:Units \times\frac{ \$10}{ \$1.50}[/tex]
Economic Order Quantity = √13333
Economic Order Quantity = 116 units
Therefore, when holding costs increase, Economic Order Quantity decreases.
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Covered interest arbitrage involves both Select one: A. the purchase of a foreign asset and a forward contract in the market for foreign exchange. B. the purchase of a domestic asset and a spot contract in the market for foreign exchange. C. the sale of a foreign asset and the purchase of a foreign contract in the market for foreign exchange. D. the sale of domestic stocks and the purchase of foreign bonds. E. none of the above.
Answer:
A. the purchase of a foreign asset and a forward contract in the market for foreign exchange.
Explanation:
The covered interest arbitrage is the commonly form of arbitrage in which the investor used the forward contract against the risk of the exchange rate
In this, the norms are agreed and set by the investors to remove the future risk
Therefore as per the given situation, the first option is correct
hence, the same is to be considered
Thus, all the other options are wrong