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Homework answers / question archive / The forward rate in a forward contract is: Select one: O a

The forward rate in a forward contract is: Select one: O a

Accounting

The forward rate in a forward contract is: Select one: O a. the spot rate at the expiration date of the contract. O b. is said to be at a discount if it exceeds the spot rate at the inception of the contract. O c. changes as the spot rate changes. O d. None of the above are true.
The ratio that Indicates how much each Dollar in sales generates net income is: Select one: O a. Earnings Per Share. O b. Profit Margin. O c. Return On Equity. O d. Return on Common Equity.
The ratio that measures a company's ability to generate sufficient cash from operations to cover capital expenditures, investments in inventories, and cash dividend is: Select one: O a. External Financing Index Ratio. O b. Earnings Quality Ratio. O c. Operations Index Ratio. O d. Cash Flow Adequacy Ratio.
A measure of the firm's ability to pay off short term obligations without relying on the sales of inventories is: Select one: O a. Acid Test (quick) Ratio. O b. Working Capital. O c. Current Ratio. O d. Net Working Capital Ratio.
Department L & M of MNC enter into the following internal sale, Department L produces product N, Department M purchases a quantity of N Product, 1,000 were units were transferred, the maximum limit of transfer pricing computed as $25 and Internal Cost Savings $ 8, the minimum limit of transfer pricing is: Select one: O a. $200 O b. $167 O c. $17. O d. $33.

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Answer : b. is said to be at the discount if it exceeds the spot rate at the inception of the contract.

If the rate goes higher than forward rate in a forward contract the contract is fixed at the contract price. it wont be the spot rate. Forward rate is an estimate. So it is the discount if it exceeds the spot rate at the inception of the contract.

Answer : Profit margin

Profit margin is the ratio which indicates the income from each sales. Return on equity is ratio of income from each amount of equity capital used. Earning per share is the amount of receipt from shares each year.

Answer : Cash flow adequacy ratio

Cash flow adequacy ratio is the ability of the company to sufficiently pay the investing and financing expenditures from the amount received from operations. Earning quality ratio is income from operations per net income. External financing index ratio means ability of company to pay the external expenses from the operations.

Answer : Net working capital Ratio

Net working capital ratio is the difference between current assets and current liabilities. It indicates the amount available to company to pay short term liabilities such as utilities payable salary payable etc.

Answer : $17

The Minimum transfer rate = Maximum price - internal savings due to internal transfer

The Minimum transfer rate = $25 -$ 8

The Minimum transfer rate = $17

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