Will a MNC issuing debt in low–interest rate currencies necessarily lower its cost of funds? Why?
What will be an ideal response?
No. The ultimate cost of the debt will also depend on currency movements. If uncovered interest rate parity holds, the cost of the low interest rate debt, expressed in the home currency, is expected to be identical to the cost of high interest rate debt. After the fact, the debt will be either less expensive than corresponding debt denominated in the domestic currency, if the foreign currency appreciates less than predicted by UIRP; or it will be more expensive if the foreign currency appreciates more than predicted by UIRP.
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Answer the following statement true (T) or false (F)
The balance sheet of Sound Designs reports total assets of $750,000 and $800,000 at the beginning and end of the year, respectively. Sales revenues are $1.5 million ($1.2 million in the previous year), net income is $150,000, and net cash flows from operating activities are $175,000. What is Sound Designs' asset turnover?
A. 2.0 times. B. 0.5 times. C. 1.9 times. D. 1.7 times.
Angelique is paid a flat rate of $2 per pair of pants that she sews at work. She is being paid under a ______ system.
A. bonus rate B. merit pay C. differential piece-rate D. straight piece-rate
A consignment deal would be an example of a(n) ________
A) unconditional contract B) sale or return contract C) sale or approval contract D) unequivocal contract