A speculator is considering the purchase of Mexican Peso call options (contract size: Peso 500,000) with a strike price $0.06/Peso. The premium is $0.007/Peso.
If the spot at expiration is $0.054/Peso, what is the speculator’s profit?
$3,000 gain
$6,500 gain
$3,500 loss
$500 loss

Answers

Answer 1

To calculate the potential gain or loss for the speculator in this scenario, we need to consider the breakeven point and the maximum potential profit. In this case, the breakeven point would be $0.067/Peso ($0.06/Peso + $0.007/Peso). If the spot price is below $0.067/Peso, the speculator would make a loss.

The breakeven point is the point at which the speculator would make neither a profit nor a loss. To calculate the breakeven point, we can add the premium to the strike price. In this case, the breakeven point would be $0.067/Peso ($0.06/Peso + $0.007/Peso). To calculate the maximum potential profit, we can subtract the breakeven point from the spot price of the Peso at expiration, and then multiply by the contract size. If the spot price is above the breakeven point, the speculator will make a profit; if it is below the breakeven point, the speculator will make a loss. Assuming the speculator purchases one call option, the total cost of the premium would be $3,500 ($0.007/Peso * 500,000). If the spot price of the Peso at expiration is $0.07/Peso, the speculator's profit would be $6,500 (($0.07/Peso - $0.067/Peso) * 500,000 - $3,500). If the spot price is below $0.067/Peso, the speculator would make a loss. It is important to note that options trading involves significant risk, and individuals should carefully consider their investment goals and risk tolerance before investing in options.

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Related Questions

when setting advertising objectives, what is the difference in a push and a pull strategy? provide an example of when each might be used.

Answers

When setting advertising objectives, businesses have two options: a push strategy or a pull strategy. The difference between the two is in the direction of promotion.

A push strategy involves promoting a product or service to the distributor, retailer, or sales team, and letting them push it to the end consumer. On the other hand, a pull strategy involves promoting the product or service directly to the end consumer, creating demand that pulls the product through the distribution channel.

A push strategy is typically used in industries where the products are highly competitive, and businesses want to create demand through distribution channels. For example, the pharmaceutical industry uses a push strategy. Pharmaceutical companies promote their products to doctors, who then prescribe them to patients. By doing this, the pharmaceutical companies create a demand for their products, and the patients purchase them.

A pull strategy is often used when the product or service is unique, or when it's essential to create brand awareness. For instance, Apple uses a pull strategy. They market their products directly to consumers, creating a brand image that consumers want to be associated with. Apple has built a reputation for having innovative and stylish products that people want to be seen with.

In conclusion, a push strategy is used to create demand through distribution channels, while a pull strategy is used to create brand awareness and demand through direct promotion to consumers. Both strategies have their benefits and drawbacks, and businesses need to choose the one that best suits their products or services.

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true/false. items that may relate to property, plant, and equipment follow: purchase price of a machine delinquent property taxes at the time of purchase

Answers

The cost of property, plant, and equipment includes expenses related to acquisition or construction, such as purchase price and installation costs. However, expenses related to financing, maintenance, or operation, such as interest on debt and repairs, are not included.

1. The purchase price of a machine is included in the cost of property, plant, and equipment.

2. Delinquent property taxes are not included in the cost of property, plant, and equipment, as they are not directly related to the acquisition or construction of the asset.

3. Interest on debt used to purchase equipment is not included in the cost of property, plant, and equipment, as it is considered a financing cost rather than a cost directly related to the asset's acquisition or construction.

4. Sales taxes paid on the purchase of equipment are included in the cost of property, plant, and equipment, as they are directly related to the acquisition of the asset.

5. Costs to install a machine are included in the cost of property, plant, and equipment, as they are directly related to the asset's acquisition or construction.

6. Ordinary repairs to equipment are not included in the cost of property, plant, and equipment, as they are considered maintenance expenses rather than costs directly related to the asset's acquisition or construction.

7. The cost to remodel a building is included in the cost of property, plant, and equipment, as it is considered an improvement to the asset.

8. Architectural fees paid for the design of a building are not included in the cost of property, plant, and equipment, as they are considered a design expense rather than a cost directly related to the asset's acquisition or construction.

9. The cost of training employees to run equipment is not included in the cost of property, plant, and equipment, as it is considered an operating expense rather than a cost directly related to the asset's acquisition or construction.

10. Transportation costs to have furniture delivered are not included in the cost of property, plant, and equipment, as they are considered a delivery expense rather than a cost directly related to the asset's acquisition or construction.

In summary, items directly related to the acquisition or construction of the asset, such as purchase price, sales taxes, and installation costs, are included in the cost of property, plant, and equipment.

On the other hand, items related to financing, maintenance, or operating the asset, such as interest on debt, repairs, and training costs, are generally not included in the cost of property, plant, and equipment.

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Complete Question:

Listed below are items that may relate to property, plant, and equipment.

1. Purchase price of a machine

2. Delinquent property taxes

3. Interest on debt used to purchase equipment

4. Sales taxes paid on the purchase of equipment

5. Costs to install a machine

6. Ordinary repairs to equipment

7. Cost to remodel a building

8. Architectural fees paid for the design of a building

9. Cost of training employees to run equipment

10. Transportation costs to have furniture delivered

Determine whether each item is included as part of the cost of property, plant, and equipment. For any item excluded from the cost of property, plant, and equipment, explains why the item was excluded.

Melvin funds small businesses that he believes have the potential to grow large. When these companies are still in their initial stages and need investment, he purchases stock at a low price and later sells them at higher prices when they are successful. Thus, Ramon is a(n)

Answers

Melvin, who funds small businesses with growth potential by purchasing stocks at low prices and selling them at higher prices, can be described as a venture capitalist or an angel investor.

Melvin's investment strategy aligns with the role of a venture capitalist or an angel investor. Venture capitalists are individuals or firms that provide funding to early-stage companies with high growth potential. They typically invest in exchange for equity or stock ownership in the company. Venture capitalists like Melvin seek out promising startups and provide financial support to help them grow and succeed.

Angel investors, on the other hand, are individuals who invest their own personal funds in early-stage businesses. They often take on higher risks by investing in companies that are in their initial stages and require capital to develop their products or services. Angel investors, like Melvin, aim to earn a return on their investments by selling their shares at a higher price when the company achieves success.

Melvin's investment approach of funding small businesses with growth potential and buying low-priced stocks aligns with the characteristics of both venture capitalists and angel investors. These types of investors play a crucial role in supporting entrepreneurial ventures and fueling innovation in the business world.

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Given a set of returns, the wider the distribution of those returns, the
Select one:
A. lower the average rate of return.
B. lower the variance.
C. lower the volatility.
D. higher the number of those returns.
E. higher the standard deviation.

Answers

The correct answer to the question is E. higher the standard deviation. The wider the distribution of returns in a set, the more dispersed the returns are from the average return. In finance, this is often measured using standard deviation, which is a statistical measure of the amount of variation or dispersion of a set of values from their mean.

Standard deviation is a measure of risk and is used to evaluate the volatility of a security or a portfolio. A higher standard deviation means higher risk, as the returns can vary widely from the average. On the other hand, a lower standard deviation implies lower risk, as the returns are more consistent around the average.

Investors use standard deviation to assess the risk and potential return of an investment. They prefer investments with lower standard deviation as it is indicative of a stable, predictable return. In contrast, investments with higher standard deviation have a higher degree of uncertainty, which could lead to larger losses or gains.

To summarize, the wider the distribution of returns, the higher the standard deviation and the higher the risk. Therefore, investors should carefully evaluate the standard deviation of an investment to determine its suitability for their portfolio.

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the stock price is $194. there are 10 million total shares. what is the total value of pear computer company?

Answers

The total value of Pear Computer Company is $1.94 billion.

To calculate the total value of Pear Computer Company, you need to multiply the stock price by the total number of shares. In this case, $194 multiplied by 10 million shares is equal to $1.94 billion. This represents the total value of the company based on the current stock price and number of outstanding shares. It's important to note that stock prices can fluctuate based on market conditions and company performance, so the total value of the company can change over time.

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Over 14 months, Perez signed five rent-to-own contracts with Rent-A-Center and TV, and a used large-screen TV and cabinet. Each contract said that "this is a rental agreement only" and that ownership would not pass unless she had paid "the total of rental payments plus the option payment necessary to acquire ownership." The property had a cash value of $9,301 but if she wanted to purchase the items, the total payments would be $18,613. The difference was the interest charged for the "privilege of buying the products over time." The range of interest on the items was between 79.7 percent and 82.7 percent. Perez stopped paying after she had made payments of $8,156.72. RAC sued for the money damages and return of the items. She then filed her own suit alleging that the interest rate exceeded the state's usury statute. Who should win, and why?

Answers

In this case, it appears that the interest rates charged by Rent-A-Center and TV on their rent-to-own contracts may exceed the usury limit set by the state. The state's usury statute sets a maximum interest rate that can be charged on loans, and if a lender charges more than this limit, the loan is considered usurious and is unenforceable.

In this case, the interest charged by Rent-A-Center and TV on the rent-to-own contracts ranges from 79.7 percent to 82.7 percent, which is significantly higher than the usury limit in most states. Therefore, Perez may have a valid claim that the interest rate charged on the contracts is usurious and unenforceable.

However, it is important to note that the contracts signed by Perez clearly state that ownership of the items would not pass unless she had paid "the total of rental payments plus the option payment necessary to acquire ownership." This suggests that the contracts were intended to be rental agreements rather than loans.

In this case, it would be up to the court to determine whether the contracts were intended to be rental agreements or loans. If they are found to be loans, then Perez may have a valid claim that the interest charged on the contracts is usurious and unenforceable.

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a process capability ratio (cp) value of _____ occurs when the natural variation in the process equals the customer’s tolerance range.

Answers

A process capability ratio (Cp) value of 1 occurs when the natural variation in the process equals the customer's tolerance range.

The process capability ratio, also known as Cp, is a statistical measure used to determine how well a process can meet the specified limits set by customers or industry standards. It is calculated by dividing the difference between the upper specification limit (USL) and the lower specification limit (LSL) by six times the standard deviation (6σ) of the process:

Cp = (USL - LSL) / 6σ

When the Cp value is 1, it indicates that the process variation (6σ) is equal to the customer's tolerance range (USL - LSL). In other words, the process is just capable of producing products within the acceptable limits set by the customer. However, this does not account for the process means being off-center, which is evaluated by another measure called Cpk.

A Cp value of 1 is considered the minimum acceptable level for a process to be deemed capable. Higher Cp values indicate a more capable process, while lower Cp values indicate a less capable process. It is important for manufacturers to monitor and improve their process capability ratios to ensure they consistently meet customer requirements and maintain product quality.

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how to get the most money from insurance for totaled car

Answers

To get the most money from insurance for a totaled car, you should take the following steps:

1. Determine the value of your car: You can use online valuation tools or get an estimate from a professional appraiser.

2. Understand your insurance policy: Review your policy to understand what is covered and what deductible you will be responsible for.

3. Document the damage: Take photos of your car and any personal belongings that were damaged.

4. Negotiate with your insurance company: If you believe the insurance company's offer is too low, you can negotiate for a higher settlement based on your documentation and valuation of your car.

5. Consider hiring an attorney: If you are having difficulty negotiating with your insurance company, you may want to hire an attorney who specializes in insurance claims to help you get the best possible settlement.

It is important to keep in mind that the amount you receive from your insurance company for a totaled car may not be enough to cover the cost of a new vehicle. However, by following these steps and being prepared to negotiate, you can maximize your payout and ensure that you receive fair compensation for your loss.

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Assume that a secure baseline operating system is planned for wide...
Assume that a secure baseline operating system is planned for wide deployment in a large organization. However, the baseline configuration prevents a mission-critical application from working. Over 100 employees use the mission-critical application daily.
The administrators researched the issue exhaustively and found no solution.
Should the administrators weaken security by not using the baseline settings? Why or why?
Is there another solution? Explain your answe

Answers

Assuming that a secure baseline operating system is planned for wide deployment, there may be another solution available.

What are the options?

One option could be to use a secure virtual machine or container environment that runs on top of the existing operating system. This would allow for a secure environment to be created without the need to completely replace the existing operating system.

The virtual machine or container can be isolated from the host operating system, providing an added layer of security.

Additionally, it may be easier to deploy and manage compared to a complete replacement of the operating system. Ultimately, the best solution will depend on the specific security requirements and limitations of the organization.

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Gloria Ammon has just won the state lottery and has the following three payout options for after - tax prize money: 1. $52,000 per year at the end of each of the next six years 2. $320,000 (lump sum) now 3. $500,000 (lump sum) six years from now The annual discount rate is 9%. Compute the present value of the third option. (Round to nearest whole dollar.) Present value of $1 : A. $268,000 B. $298,000 C. $79,733 D. $82,645

Answers

To compute the present value of the third option, we need to discount the future lump sum of $500,000 back to its present value.

The formula to calculate present value is:

Present Value = Future Value / (1 + Discount Rate) ^ Number of Periods.

In this case, the discount rate is 9%, and the number of periods is 6 years. Plugging in the values, we have:

Present Value = $500,000 / (1 + 0.09) ^ 6.

Calculating this expression, we find: Present Value ≈ $298,000 (rounded to the nearest whole dollar).

Therefore, the present value of the third option is approximately $298,000.

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TRUE/FALSE. The debt to total assets ratio measures the percentage of total debt provided by long- term creditors.

Answers

True.

The debt to total assets ratio measures the percentage of total debt provided by long-term creditors.

This ratio is calculated by dividing total debt by total assets and expressing it as a percentage. It indicates the proportion of a company's assets that are financed by debt.

A higher debt to total assets ratio suggests a greater reliance on borrowed funds to finance operations, while a lower ratio indicates a lower level of debt relative to total assets. By focusing on long-term creditors, this ratio specifically highlights the contribution of long-term debt to the company's overall capital structure. It is a useful metric for assessing a company's leverage and financial risk.

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Some financial analysts contend that reporting debt at amortized historical cost rather than at fair value:
Multiple Choice
makes it more difficult to manipulate accounting numbers.
makes it easier to manipulate accounting numbers.
makes it impossible to manipulate the accounting numbers.
has no impact on the accounting numbers.

Answers

Financial analysts contend that reporting debt at amortized historical cost rather than at fair value makes it more difficult to manipulate accounting numbers.

Financial analysts contend that reporting debt at amortized historical cost rather than at fair value makes it more difficult to manipulate accounting numbers. This is because historical cost is based on the original cost of the asset, which is a verifiable number. In contrast, fair value is based on estimates and can be subjective, making it easier to manipulate. When reporting debt at amortized historical cost, there is less room for interpretation and less potential for manipulation. However, it is important to note that this approach may not accurately reflect the current market value of the debt and may not provide the most relevant information for decision-making. Overall, while reporting debt at amortized historical cost may be more reliable, it is important for financial analysts to consider other factors such as market conditions and trends.

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Foundations Required bearing area of a rectangular footing is calculated by: A. Squaring the applied force B. Dividing the applied force by the allowable soil bearing pressure C. Multiplying the force times the height of the applied load D. None of the above

Answers

B. The required bearing area of a rectangular footing is calculated by dividing the applied force by the allowable soil bearing pressure. This is done in order to ensure that the foundation can adequately support the weight of the structure above it without sinking or settling.

The allowable soil bearing pressure is a measure of how much weight the soil can support per unit area without undergoing excessive settlement. By dividing the applied force by this value, the required bearing area of the footing can be determined, which will in turn determine the size and shape of the foundation that is needed to support the structure. Squaring the applied force or multiplying it by the height of the applied load would not provide an accurate calculation of the required bearing area.

This formula ensures that the footing size is adequate to distribute the force applied to it without exceeding the allowable pressure on the soil, thus providing a stable foundation for the structure.

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An analyst decides to select 10 stocks for her portfolio by placing the ticker symbols for all the stocks traded on the New York Stock Exchange in a large bowl. She randomly selects 20 stocks and will put every other one chosen into her 10-stock portfolio. The analyst used:
A)dual random sampling.
B)simple random sampling.
C)stratified random sampling.

Answers

The analyst, in the given scenario, used a form of simple random sampling. Therefore, the correct option is B.

Simple random sampling involves selecting a sample of individuals from a population in such a way that every individual has an equal chance of being selected. This method is simple, straightforward, and fair, making it an effective form of random sampling.

In this case, the analyst randomly selected 20 stocks from the New York Stock Exchange, ensuring that each stock had an equal chance of being chosen. Then, the analyst selected every other stock from the 20 chosen, resulting in a sample of 10 stocks for her portfolio.

This method is considered simple random sampling because each stock has an equal chance of being chosen, and the selection is made randomly without any additional criteria or structure. The other two options, dual random sampling and stratified random sampling, do not apply in this scenario because there is no division of stocks into subgroups or additional layers of randomness.

Hence, the correct option is B: simple random sampling.

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A country has the production function Y = F(K, L) = K1/3L 2/3 where Y is its level of production, K its capital stock, and L its labor force. The country saves 24% of its output each year (s = 0.24) and has a population growth rate of 1% per year (n = 0.01). The capital depreciation rate is 5% per year (δ = 0.05). The labor force grows at the same rate as the population. There is no technological progress. The country is a closed economy. Use the Solow growth model to compute the steady state values of the following variables.
(a) capital per worker (k = K/L)
(b) output per worker (y = Y/L)
(c) consumption per worker (c)
(d) investments per worker (i)
(e) the growth rate of total production

Answers

The production function for the given country in the Solow growth model is Y = F(K, L) = K1/3L2/3,

What is the production function and parameters used in the Solow growth model for the given country?

The Solow growth model is an economic framework used to analyze the long-run behavior of an economy.

In this scenario, we use the Solow growth model to calculate the steady-state values of various variables such as capital per worker, output per worker, consumption per worker, investments per worker, and the growth rate of total production.

The production function Y = F(K, L) = K1/3L2/3 represents the country's level of production, where K is the capital stock and L is the labor force.

The country saves 24% of its output each year, has a population growth rate of 1% per year, and a capital depreciation rate of 5% per year.

Since the country is a closed economy and has no technological progress, we can use the Solow growth model to calculate the steady-state values of the given variables.

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You need to extend a 2.50-inch-diameter pipe, but you have only a 1.00-inch-diameter pipe on hand. You make a fitting to connect these pipes end to end. If the water is flowing at 6.00 cm/s in the wide pipe, how fast will it be flowing through the narrow one?

Answers

The water will be flowing at approximately 19.05 cm/s through the narrow pipe.

To determine the speed of water flow through the narrow pipe, we can use the principle of continuity, which states that a fluid's mass flow rate is constant along any portion of a pipe with a wide range of diameters. This indicates that the cross-sectional area of the pipe and the fluid's velocity are a constant product.

Using this principle, we can write:

A1V1 = A2V2

Where A1 and V1 are the cross-sectional area and velocity of the wide pipe, and A2 and V2 are the cross-sectional area and velocity of the narrow pipe.

We know that the diameter of the wide pipe is 2.50 inches, so its radius is 1.25 inches, or 3.175 cm. The cross-sectional area of the wide pipe can be calculated as:

A1 = πr1^2 = 3.14 x (3.175 cm)^2 = 31.73 cm^2

We also know that the water is flowing at 6.00 cm/s in the wide pipe. Using the principle of continuity, we can solve for the velocity in the narrow pipe:

A1V1 = A2V2

31.73 cm^2 x 6.00 cm/s = A2 x V2

A2 = πr2^2 = 3.14 x (0.50 inches / 2)^2 = 0.20 in^2 = 1.29 cm^2

V2 = (A1V1) / A2 = (31.73 cm^2 x 6.00 cm/s) / 1.29 cm^2 = 146.48 cm/s

1. First, convert the diameters from inches to centimeters: 2.50 inches = 6.35 cm and 1.00 inch = 2.54 cm.

2. Calculate the cross-sectional areas of both pipes using the formula A = πr², where r is the radius (half the diameter).

- Wide pipe: A₁ = π(3.175 cm)² = 31.68 cm²

- Narrow pipe: A₂ = π(1.27 cm)² = 5.068 cm²

3. Use the principle of continuity, which states that the product of the cross-sectional area and flow velocity is constant for a fluid in a closed system: A₁v₁ = A₂v₂.

4. Solve for the flow rate in the narrow pipe (v₂): v₂ = (A₁v₁)/A₂

5. Plug in the values: v₂ = (31.68 cm² × 6.00 cm/s) / 5.068 cm² = 36.00 cm/s

So, the water will be flowing through the 1.00-inch-diameter pipe at a rate of 36.00 cm/s.

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Calculate the monthly lease payment for a 36-month lease on a car with a $29,000 MSRP, a 79% residual value, and a money factor of 0. 365. A. $358. 64 b. $128. 08 c. $169. 17 d. $105. 85 Please select the best answer from the choices provided A B C D.

Answers

To calculate the monthly lease payment, we need to consider the MSRP (Manufacturer's Suggested Retail Price), residual value, lease term, and money factor.

Given:

MSRP: $29,000

Residual Value: 79% of MSRP

Lease Term: 36 months

Money Factor: 0.365

First, calculate the residual value:

Residual Value = 79% of $29,000 = 0.79 * $29,000 = $22,910

Next, calculate the lease amount (amount financed):

Lease Amount = MSRP - Residual Value = $29,000 - $22,910 = $6,090

Now, calculate the monthly lease payment:

Monthly Lease Payment = Lease Amount * Money Factor = $6,090 * 0.365 = $2,224.85

Therefore, the monthly lease payment for this scenario is $2,224.85.

Since none of the provided answer choices match the calculated amount, none of the options A, B, C, or D is correct.

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During 2015, the Merkley Company disposed of three different assets. On January 1, 2015, prior to their disposal, the accounts reflected the following:
Asset Original Residual Estimated Cost Value Life Machine A $21,000 $3,000 8 years Machine B 50,000 4,000 10 years Machine C 85,000 5,000 15 years Accumulated Depreciation (straight line) $15,750 (7 years) 36,800 (8 years) 64,000 (12 years)
The machines were disposed of in the following ways:
a. Machine A: Sold on January 1, 2015, for $5,000 cash.
b. Machine B: Sold on December 31, 2015, for $10,500; received cash, $2,500, and a $8,000 interest-bearing (12 percent) note receivable due at the end of 12 months.
c. Machine C: On January 1, 2015, this machine suffered irreparable damage from an accident. On January 10, 2015, a salvage company removed the machine at no cost.
Required:
1. Give all journal entries related to the disposal of each machine in 2015.
2. Explain the accounting rationale for the way that you recorded each disposal.

Answers

In 2015, Merkley Company disposed of three assets, using different disposal methods. The accounting rationale for each disposal is based on machines a and b being sold and machine c being damaged.

Disposed of assets

Journal entries related to disposal of individual machines in 2015:

A. Machine A

$5000 cashAccumulated Depreciation 15,750Machine A 21,000Profit from Sales of Machine A (1) 9,750

(1) Sales Profit of Machine A = Selling Price – Book Value

= $5,000 – ($21,000 – $15,750)

= $9,750

B. Machine B

$2,500 cash

Notes Receivable (8,000 x 0.12) 960Sales Revenue 10,500Accumulated Depreciation 36,800Machine B 50,000Profit from Sales of Machine B (2) 2,160

(2) Sales Profit of Machine B = Selling Price – Book Value

= $10,500 – ($50,000 – $36,800)

= $2,160

C. Machine C

Accumulated Depreciation 64,000C 85,000 engineDisposal Loss of Machine C (3) 21,000

(3) Loss on Disposal of Machine C = Book Value – Residual Value

= $85,000 – $0

= $85,000

The accounting rationale for the way each disposal is recorded:

A. Machine A was sold for cash on January 1, 2015. The profit on sale is calculated as the selling price of the asset minus its book value. Entries record cash received, disposal of assets and gain on sale.

B. Machine B was sold on December 31, 2015, for a combination of cash and notes receivable. Gain on sales is calculated in the same way as for Machine A.

C. Machine C is damaged beyond repair and has no salvage value. Therefore, the journal entry records the disposal of the asset and the loss on disposal.

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Suppose that the current spot exchange rate is 1.50/E and the one-year forward exchange rate is 1.60/E. The one-year interest rate is 5.4 percent in euros and 5.2 percent in pounds. You can borrow at most 1,000,000 or the equivalent pound amount, that is, £666,667, at the current spot exchange rate. a. Show how you can realize a guaranteed profit from covered interest arbitrage. Assume that you are a euro-based investor. Also determine the size of the arbi- trage profit. b. Discuss how the interest rate parity may be restored as a result of the above transactions. c. Suppose you are a pound-based investor. Show the covered arbitrage process and determine the pound profit amount.

Answers

a. As a euro-based investor, you can take the following steps to realize a guaranteed profit from covered interest arbitrage:

Borrow €1,000,000 at the one-year euro interest rate of 5.4%, which results in an interest expense of €54,000 at the end of the year.

Convert the €1,000,000 to pounds at the current spot exchange rate of 1.50/E, which gives £666,667.

Invest the £666,667 in the UK at the one-year interest rate of 5.2%, which results in an interest income of £34,667 at the end of the year.

Enter into a one-year forward contract to sell the pounds back for euros at the one-year forward exchange rate of 1.60/E.

At the end of the year, you receive £701,334 from your investment in the UK, which you can sell forward for €1,121,334 (i.e., £701,334/1.60). After repaying your euro loan of €1,000,000 and interest expense of €54,000, you are left with €67,334 (i.e., €1,121,334 - €1,000,000 - €54,000) as a guaranteed profit from covered interest arbitrage.

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The emergency department staff decides to use a collective bargaining model for negotiation rather than a traditional trade union model. A traditional trade union model is characterized by:________

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A traditional trade union model is characterized by unionized workers collectively bargaining with their employer for better wages, benefits, working conditions, and other workplace issues.

The union representatives act as the voice of the workers, negotiating with the management to arrive at mutually agreeable terms. The traditional trade union model is based on the premise of conflict between the workers and management, with the union representing the workers' interests against the management's interests.

On the other hand, the emergency department staff's decision to use a collective bargaining model for negotiation indicates a more cooperative approach to resolving workplace issues. In a collective bargaining model, the workers and the management work together to identify and address common goals and concerns. This model emphasizes collaboration, communication, and compromise between the two parties to arrive at mutually beneficial solutions.

The decision to use a collective bargaining model may be indicative of a positive and constructive relationship between the emergency department staff and the management. The use of a collective bargaining model may lead to a more harmonious workplace environment and could potentially result in greater job satisfaction and retention for the staff.

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pursuant to the usa patriot act, when the government requests confidential information from employers about their employees, the employer can choose not to cooperate

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No, pursuant to the USA PATRIOT Act, when the government requests confidential information from employers about their employees, the employer cannot choose not to cooperate.

The USA PATRIOT Act (Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act) was enacted in response to the 9/11 terrorist attacks in the United States. Its main purpose is to enhance national security by granting law enforcement agencies increased surveillance powers and access to personal information.

When the government requests confidential information from employers under the provisions of the USA PATRIOT Act, the employer is legally obligated to comply. Failure to do so can result in penalties, fines, or even criminal charges. This is because the Act is designed to prevent terrorism and protect national security, which takes precedence over individual privacy concerns in these circumstances. It is important for employers to be aware of their obligations under the Act and to cooperate fully with government requests for information about their employees.

In conclusion, the USA PATRIOT Act grants the government significant powers to obtain confidential information from employers about their employees in the interest of national security. Employers are required to comply with these requests and cannot choose not to cooperate.

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The manufacture of folic acid is a competitive business. A new plant costs $100,000 and lasts for three years. The cash flow from the plant is as follows: Year-1: $43,300, Year-2: $43,300 and Year-3:$58,300. (Assume there is no tax) If the salvage value of the plant at the end of year-1 is $80,000, would you scrap the plant at the end of year-1?
A) yes
B) no
C) need more information
D) Don't know

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The answer is: A) Yes, you would scrap the plant at the end of year 1.

To determine whether to scrap the plant at the end of year 1, we need to compare the cash flow generated by the plant in year 1 with its salvage value.

The cash flow in year 1 is $43,300 and the salvage value at the end of year 1 is $80,000.

If the cash flow is less than the salvage value, it would be more beneficial to scrap the plant and sell it at the salvage value. If the cash flow is greater than or equal to the salvage value, it would be more advantageous to continue using the plant.

In this case, since the cash flow in year 1 ($43,300) is less than the salvage value ($80,000), it would be more beneficial to scrap the plant at the end of year 1.

r 1.

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the mp curve illustrates the real interest rate. how is the real interest rate determined?

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The real interest rate is determined by the interaction of the supply of and demand for loanable funds in the economy. The loanable funds market includes all types of credit markets, such as banks, bond markets, and other financial institutions.

The supply of loanable funds comes from individuals and institutions who save their money and make it available for lending. The demand for loanable funds comes from individuals and institutions who want to borrow money for various purposes, such as investment in new projects, consumption, or other financial needs.

The real interest rate is the nominal interest rate adjusted for inflation. It represents the true cost of borrowing money and reflects the purchasing power of the interest payments. In other words, it is the amount of interest paid on a loan or investment after accounting for the inflation rate.

Changes in the real interest rate can occur due to shifts in either the supply or demand for loanable funds. For example, an increase in the demand for funds, such as during a period of economic growth, can increase the real interest rate. Conversely, an increase in the supply of funds, such as through increased saving or a decrease in investment demand, can decrease the real interest rate.

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strategic management differs from business policy through its heavier emphasis on

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Strategic management differs from business policy through its heavier emphasis on long-term planning and the allocation of resources to achieve the organization's objectives.

Strategic management is the process of formulating and implementing strategies to achieve the organization's long-term goals. It involves a systematic analysis of the internal and external environment, the identification of opportunities and threats, and the development of strategies to exploit these opportunities and mitigate the threats. Strategic management focuses on the allocation of resources to achieve the organization's objectives, including the deployment of financial, human, and technological resources.

In contrast, business policy is concerned with the overall direction and scope of the organization. It includes the formulation of policies and guidelines to guide the organization's decisions and actions. Business policy tends to focus on the short-term goals of the organization and the day-to-day management of its operations.

Therefore, the main difference between strategic management and business policy is the emphasis on long-term planning and the allocation of resources in strategic management, while business policy focuses on the overall direction and scope of the organization. Strategic management is essential for organizations to achieve sustainable growth and competitive advantage in a rapidly changing business environment.

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1.If one changes the contribution rates in the objective function of an LP,the feasible region will change.the slope of the isoprofit or isocost line will change.the optimal solution to the LP is sure to no longer be optimal.All of these

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When changing the contribution rates in the objective function of an LP, the feasible region will indeed change. This is because the feasible region is determined by the constraints of the LP, and any change in the objective function can affect the constraints in some way.

For example, if the contribution rate of one variable is increased, it may affect the limits of another variable and change the feasible region. Furthermore, the slope of the iso-profit or isocost line will also change. This is because the slope of these lines is determined by the contribution rates of the variables in the objective function. So, if the contribution rates change, then the slope of the iso-profit or isocost line will change as well.

Lastly, the optimal solution to the LP is sure to no longer be optimal. This is because the optimal solution is determined by the original objective function and constraints. If any of these change, then the optimal solution will also change. It is possible that the new optimal solution may be better or worse than the original solution, but it will not be the same.

In summary, changing the contribution rates in the objective function of an LP can have significant impacts on the feasible region, the slope of iso-profit or isocost lines, and the optimal solution. It is important to carefully consider any changes to the objective function and assess the potential effects on the LP before making any adjustments.

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Consider the following figure to answer the questions that follow. Real GDP Short-run path Long-run trend of GDP During which year was average income climbing the most rapidly? a. 2000 b.2008 C. 2001 d. 2004 e. 2005

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The year during which average income was climbing the most rapidly is option B, 2008.

"Average income" refers to the amount of money earned by the average person or household over a given period of time. It is typically calculated by dividing the total income earned in a population by the number of people or households in that population.

Looking at the graph, we can see that the short-run path of Real GDP is above the long-run trend of GDP in 2008, indicating an economic boom. The steeper the short-run path, the more rapidly average income is climbing. Therefore, 2008 is the year when average income was climbing the most rapidly.

It's worth noting that this period was followed by a recession in 2009, as indicated by the drop in Real GDP below the long-run trend.

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You are attempting to value a call option with an exercise price of $100 and one year to expiration. The underlying stock pays no dividends, its current price is $100, and you believe it has a 50% chance of increasing to $120 and a 50% chance of decreasing to $80. The risk-free rate rate of interest is 10%. Based upon your assumptions, calculate your estimate of the call option's value using the two-sate stock price method.

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Based upon your assumptions, the estimated value of the call option using the two-state stock price method is $13.64.

Using the two-state stock price method, we can calculate the call option's value as follows.

1. Determine the payoff of the call option in each possible state:

If the stock price increases to $120, the payoff is $120 - $100 (exercise price) = $20

If the stock price decreases to $80, the payoff is $0, since the option will not be exercised

2. Calculate the risk-neutral probabilities:

p = (1 + risk-free rate - down state price) / (up state price - down state price)

p = (1 + 0.10 - 0.80) / (1.20 - 0.80) = 0.3 / 0.4 = 0.75

3. Discount the expected payoff back to the present value:

Call option value = [(probability of up state * up state payoff) + (probability of down state * down state payoff)] / (1 + risk-free rate)

Call option value = [(0.75 * $20) + (0.25 * $0)] / (1 + 0.10) = $15 / 1.10 = $13.64

The estimated value of the call option is $13.64.

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A node which can both send to and receive from other nodes is a a. demand nodeb. supply node. c. random node. d. transshipment node.

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The correct option is d. transshipment node. A transshipment node is a type of node in a transportation network that has the capability of both sending to and receiving from other nodes. It acts as a transfer point between different modes of transportation or different routes within the network.

It's worth noting that transshipment nodes are often used in logistics and supply chain management to optimize the movement of goods and reduce transportation costs. They can be located at strategic points within the network to facilitate the transfer of goods between different modes of transportation, such as from a truck to a train or from a ship to a plane. Transshipment nodes can also be used to balance the flow of goods between different parts of the network, helping to avoid bottlenecks and congestion. Overall, the use of transshipment nodes can help to improve the efficiency and reliability of transportation networks, which can have a significant impact on the overall economy.

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A multinational company faced with exposure to a depreciating foreign currency can reduce transaction exposure with a strategy of a. Paying or collecting early b. Paying or collecting late c. Paying late, collecting early. d. Paying early, collecting late

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A multinational company faced with exposure to a depreciating foreign currency can reduce transaction exposure with a strategy of paying early and collecting late (option d).


Step 1: Understand the terms
- Strategy: A plan of action designed to achieve a particular goal
- Transaction: A business deal or financial exchange
- Depreciating foreign currency: A situation where the value of a foreign currency is decreasing relative to the domestic currency

Step 2: Evaluate the options
a. Paying or collecting early: This strategy would increase the exposure, as the company would be receiving the foreign currency when its value is higher and paying when its value is lower.
b. Paying or collecting late: This strategy would not effectively manage the exposure, as both paying and collecting would be done when the foreign currency has depreciated further.
c. Paying late, collecting early: This strategy would increase the exposure, as the company would be paying the foreign currency when its value is lower and collecting when its value is higher.
d. Paying early, collecting late: This strategy would reduce transaction exposure, as the company would be paying the foreign currency when its value is higher and collecting when its value is lower.

In conclusion, a multinational company can reduce transaction exposure due to a depreciating foreign currency by adopting a strategy of paying early and collecting late. This approach allows the company to minimize the impact of currency depreciation on its financial transactions.

Therefore, option D is the right answer.

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a project has estimated annual net cash flows of $63,000. it is estimated to cost $239,400. determine the cash payback period. round your answer to one decimal place.

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The cash payback period for this project is 3.8 years. This means that it would take approximately 3.8 years for the project to generate enough cash flow to recover the initial investment of $239,400



To calculate the cash payback period, we need to divide the initial investment by the annual net cash flow. So, in this case, the payback period would be:



Cash Payback Period = Initial Investment / Annual Net Cash Flow

Cash Payback Period = $239,400 / $63,000

Cash Payback Period = 3.8 years



Therefore, It is important to note that the cash payback period is just one of many financial metrics that can be used to evaluate a project's viability and should be considered in conjunction with other metrics such as the net present value and internal rate of return.

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