________ is the act of trading to profit from a violation of the law of one price. A) Relative purchasing power parity B) Arbitrage C) Absolute purchasing power parity D) Purchasing power arbitrage ANSWER D
Date: September 19th, 2020
ABC Co. has an average inventory of 750. The carrying cost per item is 1.25, the ordering cost is $18 per order, and they make 28 orders per year. What is the total carrying cost for ABC Co? A) $504 B) $937.50 C) $1,166.67 D) $844.50 E) $492.65 ANSWER B
Date: September 19th, 2020
A firm has accounts receivable of $150,000. During the year, total sales are $500,000, of which $300,000 are cash sales. What is the average collection period? A) 109.5 days B) 182.5 days C) 273.8 days D) 486.7 days E) None of the above ANSWER C
Date: September 19th, 2020
Approximately how often should Jed’s Supermarket order 20 oz. cans of Splat Spiced Possum if it expects to sell 5,000 cases per year, the ordering cost is $0.50 per order, and the carrying cost is $0.75/case? A) 45.29 times per year B) 61.24 times per year C) 63.67 times per year D) 24.56 times per […]
Date: September 19th, 2020
According to relative purchasing power parity, if Belgian prices are increasing 10% faster than Japanese prices, A) the yen should fall 10% versus the Belgian franc. B) the yen should rise 10% versus the Belgian franc. C) prices in Belgium should fall 10%. D) prices in Japan should rise 10%. E) prices in Japan will […]
Date: September 19th, 2020
The order cost per order is $10. Expected sales are 500,000 units and 20,000 units are in each order. What is the total order cost? A) $20,000 B) $500,000 C) $250 D) $200,000 E) $2,000 ANSWER C
Date: September 19th, 2020
________ costs fall when larger inventory levels are maintained. A) Insurance B) Reorder C) Storage D) Carrying E) Opportunity ANSWER B
Date: September 19th, 2020
For the law of one price to hold, all of the following are necessary EXCEPT: A) transportation costs must be negligible. B) exchange rates must be fixed. C) tariffs must not be levied by any country. D) all goods and services must be tradable. E) traded goods must be homogeneous. ANSWER B
Date: September 19th, 2020
The quick ratio is 1.0. Current assets are $100,000 and current liabilities are $80,000. What is the amount in the inventory account? A) $20,000 B) $80,000 C) $125,000 D) $180,000 E) Cannot be determined with the information provided. ANSWER A
Date: September 19th, 2020
Assume that you have $900,000 to invest. The current spot rate of the Australian dollar is $0.62, and the 180-day forward rate of the Australian dollar is $0.64. Furthermore, the 180-day interest rate in the United States is 3.5% and the 180-day interest rate in Australia is 3.0%. What is the net income you will […]
Date: September 19th, 2020
