Answer:
Given that Honduras is a small economy in Central America, and it keeps a fixed exchange rate with the US, and capital is perfectly mobile, but interest rates are three percent in the US and six percent in Honduras, the explanation of the difference in these interest rates are as follows:
Honduras has a higher interest rate, meaning that its sovereign bonds pay higher values than the American ones, as well as its banks also pay higher interests on their investments compared to American banks.
This is so for a double reason: on the one hand, because the Honduran economy is less reliable than the American economy, which is larger and therefore more solvent and capable of overcoming eventual crises, with which the risk of default is less.
On the other hand, the Honduran economy is more dependent on foreign investment, so it must offer higher interest rates to attract such investments.
Answer:
A
Explanation:
the art of presenting merchandise in a creative way that helps the store reach out to people
(if its not a, then its d)
Answer:
36.26%
Explanation:
Simple rate of return:
return/investment
<u>return:</u>
In this case, it will be the cost saving for the new machine: 161,000
<u>investment</u>
We will decrease the investment by the recovery from the old machine.
468,000 new machine - 24,000 salvage value of new = 444,000
<u>Then, proceed to calculate:</u>
161,000/444,000 = 0.3612 = 36.26%
Consideration:
Is important to state that this rate, do not consider the time value of money, neither the cash flow of the project.
Answer:
They should not make the change because the price of the stocks will decrease.
Explanation:
the current price of the stocks using the perpetuity formula = dividend / required rate of return
current price with current capital structure = $5.64 / 0.123 = $45.85
if the company changes its capital structure by increasing debt, the price of the stocks will be
$5.92 / 0.136 = $43.53
since the price of the stocks would actually decrease if the capital structure changes, the change should not be made. The stockholders' wealth is measured by the price of the stocks, and if the price of the stocks decreases, then the stockholders' wealth also decreases.
Answer:
d.total factory overhead cost variance.
Explanation:
In manufacturing accounting, at the beginning of the period, manufacturing overheads (i.e. costs other than Direct Material and Direct Labor) has been applied to Work-in-process using a predetermined overhead rate. At the end of the period, if the manufacturing overhead account shows a debit balance, that signifies that overhead has been under-applied (i.e. the manufacturing overhead cost applied to work in process is <u>less </u>than the actual manufacturing overhead cost for the period), and contrariwise if the manufacturing overhead account shows a credit balance, it means the overhead is over-applied (i.e. the manufacturing overhead cost applied to work in process is <u>more </u>than the actual manufacturing overhead cost for the period). In any case this balance warrants an adjustment to close out the books, by transferring it to the cost of goods sold account.
