Consider the dollar- and euro-based borrowing opportunities of companies A and B. € borrowing $ borrowingA€7% $8%B€6% $9%A is a U.S.-based MNC with AAA credit; B is an Italian firm with AAA credit. Firm A wants to borrow €1,000,000 for one year and B wants to borrow $2,000,000 for one year. The spot exchange rate is $2.00 = €1.00 and the one-year forward rate is given by IRP as  = .Suppose they agree to the swap shown here. Is this mutually beneficial swap equally fair to both parties?

alt="" style="vertical-align: 0.0px;" height="281" width="348" />

A. No, company A saves 1 percent in euro but company B saves only 1 percent in dollars when the spot exchange rate is $2.00 = €1.00-A is twice as better off as B.
B. No, company A borrows at 6 percent in euro but company B borrows at 8 percent in dollars.
C. Yes, A will be better off by €1 percent on €1m; B by 1 percent on $2m and $2.00 = €1.00.
D. Yes, QSD = [€7% ? €6% × $2.00/€1.00] ? ($8% ? $9%) = $2% + $1% = $3%.

---

Answer: C

Business

NetJets is a company that offers 1/16 or more ownership in a jet plane for a price beginning at $325,000. It gives purchasers privacy, convenience, and flexibility as well as saves them time since the plane is available within four hours unless it's booked by one of the other shareholders. This is most likely an example of

A. a low-involvement purchase that involves limited problem solving. B. a low-involvement purchase that involves extended problem solving. C. a high-involvement purchase that involves extended problem solving. D. a medium-involvement purchase that involves limited problem solving. E. a high-involvement purchase that involves routine problem solving.

Gabriel, the CEO of a large global production company, is excited about the introduction of statistics and computer simulations in the design stage of the company's products. Gabriel is using

A. the design approach. B. quantitative techniques. C. MBO. D. scientific management. E. behavioral management.

The purpose of the exclusionary rule is to deter police from misconduct

a. True b. False Indicate whether the statement is true or false

Tomlison Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year:    Cost of goods manufactured$1,589,000Cost of goods sold (unadjusted)$1,517,000 The journal entry to record the unadjusted Cost of Goods Sold is:

A.