Do you think the currency of zeus

Assignment Help Finance Basics
Reference no: EM131117644

Assume that the level of capital flows between the United States and the country of Zeus is negligible (close to zero) and will continue to be negligible. There is a substantial amount of trade between the United States and the country of Zeus. The main import by the United States is basic clothing purchased by U.S. retail stores from Zeus, while the main import by Zeus is special computer chips that are only made in the United States and are needed by many manufacturers in Zeus. Suddenly, the U.S. government decides to impose a 20 percent tax on the clothing imports. The Zeus government immediately retaliates by imposing a 20 percent tax on the computer chip imports. Second, the Zeus government immediately imposes a 60 percent tax on any interest income that would be earned by Zeus investors if they buy U.S. securities. Third, the Zeus central bank raises its local interest rates so that they are now higher than interest rates in the United States.

Do you think the currency of Zeus (called the zee) will appreciate or depreciate against the dollar as a result of all the government actions described above? Explain. 

Reference no: EM131117644

Questions Cloud

Classifying inflows and outflows of cash : Classifying inflows and outflows of cash Classify each of the following items as an inflow (I) or an outflow (O) of cash, or as neither (N).
What is the after-tax operating cash flow expected : Standard Corporation is investing $400,000 of fixed capital in a project that will be depreciated straight-line to zero over its ten-tear life. Annual sales are expected to be $240,000, and annua cash operating expenses are expected to be $110,000. A..
Compute the inventory for this department as of january 31 : Compute the inventory for this department as of January 31, at retail prices. Compute the ending inventory using lower-of-average-cost-or-market.
Payback period for project : Christopher Electronics bought new machinery for $5,135,000 million. This is expected to result in additional cash flows of $1,220,000 million over the next 7 years. What is the payback period for this project? The acceptance period is five years.
Do you think the currency of zeus : Do you think the currency of Zeus (called the zee) will appreciate or depreciate against the dollar as a result of all the government actions described above? Explain.
Find the total amount of cash reserves : If the total money stock (supply) is $100,000, find the total amount of cash reserves in the vaults of all banks in the economy.
What is the payback period : The firm uses payback period criteria of not accepting any project that takes more than for years to recover costs. The company anticipates cash flows of $436,386; $512,178; $564,755; $764,997; $816,500, and $825,375 over the next six years. What ..
Calculate interest-taxes-net income-eps and roe : Paw Patrol is considering2 different capital structures. Structrue A is 100% equity with 150,00 shares outstanding and $500,000 market value. Structure B is 50/50 debt/equity split with total market value of $500,00. Rate on debt will be 10%, assume ..
Funds to different governmental units : During a budget speech, the Minister for Finance will give detailed appropriations (allocations) of funds to different governmental units.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the net present value of the investment assuming

What is the net present value of the investment, assuming the required rate of return is 24%? Would the company want to purchase the new machine?

  Service sector using revenue recognition

Service sector using revenue recognition based on a thorough review and discussion of these data

  Executive summary of future trends

Make a executive summary in which you recognize and discuss three to five evolving trends which influence innovation.

  You feel that an appropriate evebitda ratio for csh is 9

csh has ebitda of 5 million. you feel that an appropriate evebitda ratio for csh is 9. csh has 10 million in debt 2

  Ontario inc manufactures two products standard and enhanced

ontario inc. manufactures two products standard and enhanced and applies overhead on the basis of direct-labor hours.

  What is the annual coupon rate on this bond

The current price of a 10-year, $1,000 par value bond is $1,158.91. Interest on this bond is paid every six months, and the simple annual yield is 14 percent. Given these facts, what is the annual coupon rate on this bond?

  What is the amount of the last dividend paid

Weisbro and Sons common stock sells for $51 a share and pays an annual dividend that increases by 4.0 percent annually. The market rate of return on this stock is 9.70 percent. What is the amount of the last dividend paid by Weisbro and Sons?

  Find the nominal rate of interest that compounded half-year

Find the nominal rate of interest that compounded half-yearly equivalent to an effective rate of 10% p.a. Please show all working out. Word preferred.

  Valuation of the bond

What is the valuation of the bond if the market interest rates are 12%? What is the valuation of the bond if the market interest rates are 6%?

  Qestion 2 15 points an investment company recently issued

question 2. 15 points an investment company recently issued convertible bonds with a 1000 par value. the bonds have a

  If the owner of the brand wants to verify

If the owner of the brand wants to verify this with a small sample of 10 randomly selected consumers find the probability that 9 of the 10 consumers recognize the brand name as well as the probability that 9 out of 10 do not.

  How much did the stock price change over the past year

Shareholders had a good year, earning a 18% annual rate of return. The P/E ratio today is 13.9 and the company just announced earnings per share of $3.20 . The company has a 25% payout ratio. How much did the stock price change over the past year?a. ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd