Lakonishok Equipment has an investment opportunity in Europe. The project costs €13 million and is expected to produce cash flows of €2.6 million in Year 1, €3.2 million in Year 2, and €3.7 million in Year 3. The current spot exchange rate is $1.41/€; and the current risk-free rate in the United States is 2.0 percent, compared to that in Europe of 2.7 percent. The appropriate discount rate for the project is estimated to be 14 percent, the U. S. cost of capital for the company. In addition, the subsidiary can be sold at the end of three years for an estimated €8.6 million. Use the exact form of interest rate parity in calculating the expected spot rates.

Ida sidha karya company is a family-owned company located on the island of bali in indonesia. the company produces a handcrafted balinese musical instrument called a gamelan that is similar to a xylophone. the gamelans are sold for $860. selected data for the company’s operations last year follow: units in beginning inventory 0 units produced 320 units sold 285 units in ending inventory 35 variable costs per unit: direct materials $ 135 direct labor $ 355 variable manufacturing overhead $ 30 variable selling and administrative $ 15 fixed costs: fixed manufacturing overhead $ 64,000 fixed selling and administrative $ 27,000 the absorption costing income statement prepared by the company’s accountant for last year appears below: sales $ 245,100 cost of goods sold 205,200 gross margin 39,900 selling and administrative expense 31,275 net operating income $ 8,625 required: 1. under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. prepare an income statement for last year using variable costing. what is the amount of the difference in net operating income between the two costing methods?

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Suppose your rich uncle gave you $50,000, which you plan to use for graduate school. you will make the investment now, you expect to earn an annual return of 6%, and you will make 4 equal annual withdrawals, beginning 1 year from today. under these conditions, how large would each withdrawal be so there would be no funds remaining in the account after the 4th withdraw?