International Finance Problem Set on Working Capital Management1. Rossignol Co. manufactures and sells skis and snowboards in France, Switzerland and Italy, and also maintains a corporate account in Frankfurt, Germany. Rossignol has been setting separate operating cash balances in each country at a level equal to expected cash needs plus two standard deviations above those needs, based on a statistical analysis of cash flow volatility. Expected operating cash needs and one standard deviation of those needs are below.Rossignol’s Frankfurt bank suggests that the same level of safety could be maintained if all precautionary balances were combined in a central account at the Frankfurt headquarters.a. How much lower would Rossignol’s total cash balances be if all precautionary balances were combined? Assume cash needs in each country are normally distributed and are independent of each other.b. How much would the company save annually, if financing costs are 6% p.a., from centralizing its cash holdings?

Answer:

Thus, the projected total annual return is $169,740.

The answer and procedures of the exercise are attached in the following archives.

Explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

Answer:

D) $260 million

Explanation:

Using the accounting equation which states that

Assets = shareholder's equity + liabilities

Market value of assets = market value of equity + market value of debt (liabilities)

Market value of equity = $200 million

Market value of debt = $60 million

Market value of assets = $200 million + $60 million

                                      = $260 million

The right option is D) $260 million

Answer:

a. A cost that is necessary for the overall operation of the business but not directly related to a contract

Explanation:

Option B - Allocable costs cannot be considered if the contractor is doing business with the government.

Option C - If the cost is exempted, it cannot be specifically allowable for a contract, or a cost that is beneficial to both the contract and other work.

Option D - Indirect costs cannot be allowable.

Option A - It is the right answer because allowable cost should be significant for the operations with an indirect relation with the contract. If it is linked with the overall operations, it can be considered as allowable to a contract.

For a cost to be considered allocable to a contract, it must meet specific criteria, including being necessary for the overall operation of the business but not directly related to a contract. There are five bases for cost allowability in total.

In order for a cost to be considered allocable to a contract, it must meet certain criteria. One of these criteria is that it must be a cost that is necessary for the overall operation of the business but not directly related to a contract. This means that the cost is incurred for the general functioning of the business and is not specific to a particular contract.

The other four bases for cost allowability are:

A cost that is incurred specifically for a contract

A cost that is beneficial to both the contract and other work

A cost that is exempt from compliance with Government and industry accounting standards

An indirect cost that is not part of the manufacturing overhead cost pool

The stock price for Halliford Corporation during years 0, 1, and 2 would take into account the retained earnings during these years and their investment return. Dividends aren't paid out for these years as the company retains all its earnings. The future dividends are discounted back to their present value using the equity cost of capital.

The question requires an estimate of the price of Halliford Corporation’s stock for the first three years considering the company's earnings retention and reinvestment strategy. First, we need to calculate the dividend payments made by the firm. For the first two years, Halliford Corporation retains all its earnings indicating there are no dividends paid during these years. Afterwards, the company retains 50% and 20%, meaning it pays out as dividends 50% and 80% of the earnings respectively.

The stock price at any given time is the present value of all its future dividends. If there are no dividends paid out in the first two years, the price in years 0, 1, and 2 can simply accumulate the retained earnings from those years times their respective investment returns. To get the price, we also need to discount the dividends paid in year 3 and 4 back to their present values using the equity cost of capital.

Please take note, this calculation only takes into account the given information and assumes that the earnings per share remain constant for all the years. The actual stock price might vary due to a plethora of other factors in real-world scenarios, including market demand and supply, overall economic conditions, and investor sentiment.

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Solution:

Net Present Worth (NPW) ($ Million) = - 2,000 + 100 x PVIFA(5%, 30)

                                                            = - 2,000 + 100 x 15.3725**

                                                             = - 2,000 + 1,537.25

                                                             = - 462.75

Since NPW < 0, the project is financially not viable.

The NPV analysis of the proposed new arena in New York suggests that the present value of the benefits over 30 years at a 5% interest rate is $1.537 billion, which is less than the $2 billion upfront costs. Thus, it does not make financial sense to build the facility.

Financial Viability of Building a New Arena

To determine if it makes financial sense for New York to build a new $2 billion arena with annual benefits of $100 million for 30 years at an interest rate of 5%, we must perform a Net Present Value (NPV) analysis. This involves discounting future cash flows back to their present value to see if they cover the initial investment. First, we find the present value of the annual benefits using the formula for the present value of an annuity:

PV = P × [(1 - (1 + r)^-n) / r]

Where P is the annual payment ($100 million), r is the interest rate (5% or 0.05), and n is the number of periods (30 years). Plugging in the values, we get:

PV = $100 million × [(1 - (1 + 0.05)^-30) / 0.05]
= $100 million × 15.3725
= $1.537 billion

The present value of the benefits over 30 years is $1.537 billion, which is less than the $2 billion upfront cost. Therefore, based on the NPV analysis, it does not make financial sense to build the new facility as the costs outweigh the benefits.

Answer:

852 units

Explanation:

The break-even point is number of unit produced whereas the cost of in house produced equal to selling price of similar products

Selling price of similar products  = fixed cost per unit + variable cost per unit

$5.75 = $3,750/ number of unit produced + $1.35

number of unit produced = $3,750/($5.75-$1.35) = 852 units

Answer:

305,000 Shares

Explanation:

The approriate number of shares to be used in the basic earnings per share computation for 2018 is calculated thus:

         =(300,000×1.05)= 315,000

Answer:

1 EUR = 120 JPY

Explanation:

As the purchasing power parity theory, the exchange rate of currency 1 to currency 2  = Cost of good  in currency 1 / cost of same valued item  in currency 2

In this case,  a Lexus LS400 and a Mercedes C300 are considered to be of equivalent value, then the exchange rate between the yen and the euro

= price of Lexus in Tokyo/ price of Mercedes  in Stuttgart

= 6,000,000 JPY/ 50,000 EUR

= 120 JPY/EUR

Answer:

Depreciation for year 3 = $115518

BV = $57798

Explanation:

The modified accelerated cost recovery method employees a classification-based approach to depreciating certain assets, once classified are assigned respective rates of depreciation. for example, assets classified under automobiles, trucks and machinery are treated under 5-year MACRS and will be depreciated at 20%, 32%, 19.2% and so on.

In this question the bridge across Rio Grande being built by Del Norte Brick co is treated under 3-year MACRS, for which the rates are as follows:

33.33% for the first year

44.45% 2nd year

14.81% 3rd year

7.41% 4th year

We have been asked to determine 3rd years' depreciation and book value, determined as follows:

Depreciation year 1: $780000 33.33% = $259974

Depreciation year 2: $780000 44.45% = $346710

Depreciation year 3: $780000 14.81% = $115518

So the depreciation for year 3 = $115518

The book value is calculated as follows:

Book value = cost - accumulated depreciation

BV = $780000 - $722202

BV = $57798

Final answer:

To calculate year 3 depreciation for Del Norte Brick Co.'s bridge using MACRS, take $780,000 multiplied by 2.564%, resulting in a $19,999.20 expense. Summing up the depreciation from years 1 to 3 and subtracting from the initial cost gives a book value of $720,805.80 at the end of year 3.

Explanation:

To determine the depreciation and book value for year 3 using the Modified Accelerated Cost Recovery System (MACRS) method for the bridge owned by Del Norte Brick Co., it is important first to identify the class life of the asset according to the IRS guidelines. While the exact class life for a bridge is not specified in the question, most nonresidential real property falls under the 39-year MACRS class. For the purpose of this example, assuming the bridge qualifies for this recovery period, you would then consult the MACRS depreciation tables to find the corresponding depreciation percentage for year 3.

Under the MACRS system for a 39-year property class, the year 3 depreciation percentage is typically around 2.564% of the asset's cost. Here's the calculation for the bridge's depreciation expense in year 3:

To find the book value at the end of year 3, you subtract the accumulated depreciation of the first three years from the initial cost.

Assuming there was no salvage value and the same percentage rate is applied in the first two years, the accumulated depreciation would be calculated as follows:

Then we calculate the book value at the end of year 3:

Therefore, the depreciation expense for year 3 is $19,999.20, and the book value of the bridge at the end of year 3 is $720,805.80.

Answer: A) $0 $30,000

Explanation:

The question states 'amount in gain recognized'

In Year 4, Carac sells to Cannoli land worth $90,000, therefore, in year 3 Carac would report $0

In year 6 Cannoli sells the land to an unrelated third party for $120,000.

Therefore, $120,000 - $90,000 = $30,000 of gain will be reported by Cannoli.  

Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

Answer and Explanation:

That since MC = zero, but Price charged is greater than MC, Therefore the market is characterized by imperfect Competition, because in perfect competition, the price = MC  So that the market should have some degree of monopoly power.

The Sacramento Kings operate in a market with low barriers to entry and high competition. The low marginal cost of admitting an additional fan suggests that the Kings can admit more fans without incurring significant additional costs. The average ticket price of $60 indicates that there is still demand for tickets at that price point.

The fact that the marginal cost of admitting an additional fan to watch the Sacramento Kings play basketball is close to zero, while the average price of a ticket is about $60, suggests that the Kings operate in a market with low barriers to entry and high competition. When the marginal cost is close to zero, it means that the Kings can admit more fans without incurring significant additional costs. However, the average ticket price of $60 indicates that there is still demand for tickets at that price point, meaning that the market is willing to pay that amount.

Final answer:

The first call option with an exercise price of $85 has a value of approximately $16.67, calculated by discounting the average of the possible end-of-year values. The second call option with an exercise price of $115 has a value of approximately $1.90, based on the discounted expectation of its single profitable outcome.

Explanation:

The value of a call option on a stock can be assessed by considering the possible outcomes at expiration and discounting them back to the present value, given a risk-free interest rate such as the yield on T-bills. Call options provide the holder the right, but not the obligation, to purchase the underlying stock at a specified exercise price before the option expires.

Part A: Call Option with Exercise Price of $85

If the stock price ends up at $86, the call will be worth $1 (86 - 85). If the stock price rises to $119, the call will be worth $34 (119 - 85). We would average the two possible values, weighted by the probability of occurrence. Assuming risk-neutrality, both outcomes are equally likely, so the call option's expected payout is $17.50 (Average of $1 and $34). We then discount this back at the T-bill yield of 5%, which results in a value of $16.67 for the call option.

Part B: Call Option with Exercise Price of $115

If the stock price ends up at $86, the call will be worthless since $86 is less than the exercise price of $115. If the stock rises to $119, the call will be worth $4 (119 - 115).

Again assuming risk-neutrality and equal probability, the expected payout is $2.

Discounting this at 5% gives us a present value of $1.90 for the call option.

Therefore, the value of the call option with a $115 exercise price is $1.90.

To achieve the social optimum, the government could set a tax equal to $6 per unit sold.

Explanation:

The social optimum seems to be the distribution chosen by a good social planner who is limited by resources allocation only. In particular, the social optimum can not be achieved if there are limitations on the social planner's policy tools.

Proponents of significant increases or cuts in the United States marginal tax rates have long provided statistical evidence of the existence of their proposals.

The elasticity of earned income figures was actually a relatively new description of behavioral reactions to marginal taxes that have historically been studied.

Answer:

esteem needs

Explanation:

Esteem needs -

The term esteem needs , is used for the need of self - confidence and respect , is referred to as esteem needs.

It is a human mentality or behavior , where the human being deserves all respect and values from others .

Hence , the people works for the respect their whole life and therefore , expects to get the respect for the same .

Hence, from the given scenario of the question, the correct term is esteem needs.

Answer:

($66,000)

Explanation:

Financing activities: It measures those transactions which are related to the long term liabilities and stockholder equity. The issuance of shares is an inflow of cash whereas redemption, the retirement of bond and dividend paid is a cash outflow in which the cash balance is reduced.

Since in the given question, the bond is retired for $66,000 cash which represents the cash outflow for $66,000 only as it includes the transaction of cash

Answer:

People is against outsourcing because they think this business tactic is based on the idea of avoiding the employer's responsibilities. On the other hand, others believe it is a practice that allows companies to focus resources on the core activities delegating not critical functions to others with higher expertise or efficient execution levels.

Explanation:

Take as an example China and the USA. Technology companies as Apple have interest in outsourcing manufacture functions to these countries because labor cost is cheaper (labor arbitrage). By outsourcing the manufacture functions, Apple has to import to the USA the parts, and a rise in trade barriers that could increase the tariff of Chinese manufacture products could hinder this practice. If we think a world where labor rights are respected everywhere, I think outsourcing could be a good business practice because allow companies to optimize the use of resources, promoting specialization and higher levels of efficiency, increasing the production of goods and therefore, the economic well-being of the population. In that sense, I think outsourcing could promote a healthy American economy

Answer:

a) 48.95%

b) 22.05%

c) 14.21%

d) 10.48%

Explanation:

Data provided in the question:

Cost of project today i.e present value = $45,000

Future value = $330,000

Now,

IRR = [tex][\frac{\text{Future value}}{\text{initial cost}}]^{\frac{1}{n}[/tex] - 1

Here,

n = Number of years for which cash flow occurs

thus,

a) The future cash flow occurs in 5 years

n = 5

IRR = [tex][\frac{\$330,000}{\$45,000}]^{\frac{1}{5}[/tex] - 1

= 0.4895

or

= 48.95%

b) The future cash flow occurs in 10 years

n = 10

IRR = [tex][\frac{\$330,000}{\$45,000}]^{\frac{1}{10}[/tex] - 1

= 0.2205

or

= 22.05%

c) The future cash flow occurs in 10 years

n = 15

IRR = [tex][\frac{\$330,000}{\$45,000}]^{\frac{1}{15}[/tex] - 1

= 0.1421

or

= 14.21%

d) The future cash flow occurs in 10 years

n = 15

IRR = [tex][\frac{\$330,000}{\$45,000}]^{\frac{1}{20}[/tex] - 1

= 0.1048

or

= 10.48%

Answer:

Cash A/c Dr $12,000

Account receivable A/c Dr $18,000

       To Hardware revenues A/c $30,000

(Being the sale of hardware is recorded)

Explanation:

The journal entry is shown below:

Cash A/c Dr $12,000

Account receivable A/c Dr $18,000

       To Hardware revenues A/c $30,000

(Being the sale of hardware is recorded)

Since the sale is taken which increase the current asset i.e cash account and the account receivable by $12,000 and $18,000 respectively so we debited it and the revenue is an income so we credited it

Answer:

The Journal entries are as follows:

(i) During 2020,

Cash/ Accounts receivable A/c   Dr. $1,000,000

To sales revenue A/c                                             $1,000,000

(To record the product sold)

(ii) Warranty expenses A/c    Dr. $70,000

To Inventory A/c                                         $70,000

(To record the Warranty expenses)

(iii) Adjusting entry,

Warranty expenses A/c    Dr. $55,000

To Liabilities under warranty A/c           $55,000

(To record the December 31 adjusting entry)

Liabilities under warranty = Warranty costs - servicing warranty claims

                                          = $125,000 - $70,000

                                          = $55,000

Streep Factory will record sales of $1,000,000 by debiting Accounts Receivable and crediting Sales Revenue. The expected $125,000 warranty costs are recorded as a debit to Warranty Expense and a credit to Warranty Liability. The $70,000 spent on servicing warranty claims is recognized as a debit to Warranty Liability and a credit to Inventory.

To record the sales, Streep Factory will debit Accounts Receivable and credit Sales Revenue by $1,000,000.

Journal entry:

To account for the expected warranty costs, Streep will debit Warranty Expense and credit Warranty Liability by $125,000.

Journal entry:

At the end of the year, Streep spent $70,000 servicing warranty claims. This expenditure is recognized by debiting Warranty Liability and crediting Inventory by $70,000.

Journal entry:

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Answer:

Please help me! https://brainly.com/question/14319457

Critical Authority is not a lawful authority and can lead to unauthorized commitments, potentially resulting in breaches of trust, legal disputes, and financial and reputational damage.

In a legal context, unauthorized commitments occur when actions are taken or commitments made by someone who does not have the legal authority to do so. From the given options, the one that does NOT represent lawful authority and could potentially lead to unauthorized commitments is Critical Authority.

The terms 'Apparent Authority', 'Evident Authority', and 'Rightful Authority' are all recognized legal concepts associated with someone's lawfully recognized power to make decisions or commitments. On the other hand, 'Critical Authority' is not a recognized legal term and hence does not represent lawful authority, leading to unauthorized commitments when used.

An unauthorized commitment can lead to serious consequences such as breach of trust, legal disputes, and potential financial and reputational damage for the individual or organization involved.

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Answer:

The correct word for the blank space is:  2,9%.

Explanation:

Teleworking is a type of work agreement in which employees have the freedom of taking their regular duties to a different place from the regular framework. The hours of work are paid as well at a rate established in the agreement. According to the 2017 State of Telecommuting Report, 2,9% of the total United States work from home at a certain point which represents almost 4 million workers under that regime.

Answer:

$50

Explanation:

Given that,

Annual dividend per share = $6

preferred stock trading yesterday at = $60 per share

Required rate of return for the stock went up to = 12%

Cost of preferred stock = (Dividend ÷ share price)

0.12 = (6 ÷ New share price )

New share price = (6 ÷ 0.12)

New share price = $50

Therefore, the new price of the shares will be $50.

Answer:

Option (c) is correct.

Explanation:

Given that,

Factory produces = 130,000 televisions per quarter

Total production hours used by the factory per quarter = 9,000

Therefore,

Velocity of units per hour = (Number of units produced ÷ Time taken to produce those units. )

Velocity of units per hour = (130,000 units ÷ 9,000 hours )

Velocity of units per hour = 14.44 units per hour

Answer:

Direct material cost for each equivalent unit =$1.04

Conversion cost for each equivalent unit = $0.40

Explanation:

Given data:

direct material cost = $52000

units of material = 50000

Equivalent units for october =  36000

conversion cost for october = $21600

direct material cost for each equivalent unit = direct material cost/ equivalent conversion units

direct material cost for each equivalent unit = 52000/50000 = $1.04

conversion cost for each equivalent unit = conversion cost/ equivalent cost

conversion cost for each equivalent unit =21600/36000 = $0.40

To compute the cost per equivalent unit of production for direct materials and conversion costs, use the formula: Cost of completed units / Equivalent units = Cost per equivalent unit. The direct materials cost per equivalent unit is $1.04 and the conversion cost per equivalent unit is $0.60.

To compute the cost per equivalent unit of production for direct materials and conversion costs, you can use the following formula:

Cost of completed units / Equivalent units = Cost per equivalent unit

First, determine the cost of completed units. For direct materials, it is $52,000 and for conversion costs, it is $21,600. Next, find the equivalent units. For direct materials, it is 50,000 and for conversion costs, it is 36,000.

Finally, plug in the values into the formula:

Direct materials cost per equivalent unit = $52,000 / 50,000 = $1.04

Conversion cost per equivalent unit = $21,600 / 36,000 = $0.60

The number of shares outstanding at the end of the year 36,516,357

A share is a unit of a company, allocated to an individual. The holders of shares are called shareholders hence are owners of the company.

Number of common stock outstanding at the end:

= Number of common stock the  beginning  + Number of additional common stock issued      

=    35,949,592 + 566,765

=  36,516,357 shares

Hence, the number of shares outstanding at the end of the year 36,516,357

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To calculate the shares outstanding for Fourth Wall Inc. at the end of the fiscal year, we first update the totals for issued shares and treasury stock, then subtract the updated treasury stock from the issued shares, resulting in 33,394,899.731 shares outstanding.

The question presents a scenario involving Fourth Wall Inc., where we must calculate the number of shares outstanding at the end of the fiscal year. Initially, the company had 35,949,592 shares issued and 7,331.269 shares in treasury stock. During the fiscal year, an additional 566,765 shares were issued, and the treasury stock increased by 3,114,188.

To find the outstanding shares at the year's end, we first add the newly issued shares to the initial amount of issued shares (35,949,592 + 566,765) which equals 36,516,357. Then, we update the treasury stock total (7,331.269 + 3,114,188) giving us 3,121,457.269 shares. Finally, to find the shares outstanding, we subtract the treasury stock from the total issued shares (36,516,357 - 3,121,457.269), resulting in 33,394,899.731 shares outstanding at the year's end.

Answer:

The correct answer is letter "B": The quantity demanded of hot dogs increases, and the demand for hot dog buns increases.

Explanation:

According to the demand theory, as long as the price of a product decreases the quantity demanded increases. The theory explains the relationship between the price and quantity demanded of a good or service within a market. That relationship is said to be inversely proportional.

In that case, if the price of the hot dogs is reduced by half, the quantity demanded is likely to increase. Supplementary goods such as hot dog buns are prone to see an increase in their demand.

Answer: I aswell think it is B.

Explanation: If the quanity increases it means that the demand for hot dogs increases, and you cannot have hot dogs without buns, or else you will be stuck using bread, or nothing.

Answer:

1. D. barriers to entry

2. B. ​long-run; increases 

3. D. All of the above

Explanation:

Anything that keeps new firms from entering an industry in which firms are earning economic​ profits is known as a barrier to entry.

When an industry have high barriers to entry, it is difficult for new firms to enter into the industry. Therefore, firms in an industry with high barriers to entry would continue to earn economic profit.

A firm earns economic profit where price is greater than average total cost.

An example of an industry with high barriers to entry are monopolies and oligopolies.

Monopolies are industries where there is only one firm operating in the industry.

Oligopolies are industries where there are only few firms operating in the industry.

A monopoly or oligopoly can arise for the following reasons:

1. Economies of scale : in the long run, when total average cost falls as output increases, the firm is said to be experiencing economies of scale. A firm can experience economies of scale because of its large size. The large size of the firm makes the firm enjoy discounts because of bulk buying or they borrow at lower costs because of their large size.

2. Ownership of a key input: A monopoly can arise if the firm owns a key input needed in the production process. Ownership of a key input prevents other firms from entering into the industry as they do not have assess to the input.

3. Patents: Patents are rights given to an inventor to prevent others from using, selling or making their invention for a period of time. When a firm makes an invention and gets a patent, it prevents other firms from entering into the industry and therefore the firm with the patent can function as a monopoly for the duration where the patent is effective.

At the other end of the spectrum is a perfect competition where there are no barriers to entry or exit of firms into the industry. Therefore, there are many sellers in the industry and the firms do not earn economic profit in the long run.

I hope my answer helps you.

Answer:

correct option is B. about 30 years

Explanation:

given data

real per capita GDP west = $10,000

annual growth rate = 2.33%

real per capita GDP east = $2,500

annual growth rate = 7%

to find out

How many years will it take for East  to catch up GDP of West

solution

we know here that future value is equal to real GDP of west after time  will be

future value = real per capita GDP west × [tex]rate^{t}[/tex]

future value = 10000 × [tex](1+0.0233)^{t}[/tex] .....1

and

future value = real per capita GDP east × [tex]rate^{t}[/tex]

future value = 2500 × [tex](1+0.07)^{t}[/tex] .....2

compare equation 1 and 2

10000 × [tex](1+0.0233)^{t}[/tex]  = 2500 × [tex](1+0.07)^{t}[/tex]

4 [tex](1.0233)^{t}[/tex]  =  [tex](1.07)^{t}[/tex]

t = about 30 years

so correct option is B. about 30 years

It will take approximately 30 years for the real per capita GDP of East Quippanova to match that of West Swimsuit. The calculation was made using the formula for compound growth and by comprehending annual percentage growth rates for each nation.

This problem involves computing compound growth over time, specifically in the matter of real per capita GDP (Gross Domestic Product). It's a common kind of calculation in economics. The formula we use to solve it is based on the law of exponential growth.

East Quippanova’s per capita GDP (E) is growing at a faster rate than that of West Swimsuit (W). So, in terms of the formula, we state that the GDP of East Quippanova will equal West Swimsuit's when E(1+ 0.07)^t = W(1+ 0.0233)^t. By substituting the given GDP per capita values in those formulas, we get 2,500(1+ 0.07)^t = 10,000(1+ 0.0233)^t.

Now, dividing both sides by 2,500, we have (1+ 0.07)^t = 4 (1 + 0.0233)^t. To isolate 't', we can take the natural logarithms of both sides and use the properties of logarithms to derive the final equation: t = ln(4) / (ln(1.07) - ln(1.0233)). Solving this equation we find that t is approximately equal to 30 years. Therefore, it will take roughly 30 years for East Quippanova to match the real per capita GDP of West Swimsuit.

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Answer:

2021 $975

2022 $2925

Explanation:

Assuming that the financial year of the Oberly Corporation is from January to December.

The amount of interest revenue that will be recognised by the Oberly Corporation in its financial statements for the year ended December 31, 2021 will be as follows:

Interest Revenue=Principal amount*interest rate*3/12

Interest Revenue=39000*10%*3/12=$975

Since the Oberly Corporation has extended loan to its employee on October 1,2021, therefore only interest revenue 3 months will be recognised in  the year ended December 31, 2021.

The amount of interest revenue for the remaining 9 months will be recognised by the Oberly Corporation in its financial statements for the year ended December 31, 2022 and will be as follows:

Interest Revenue=39000*10%*9/12=$2,925