Assume the annual British interest rate is above the annual U. S. interest rate. Also assume the pound's forward rate of $1.75 equals the pound's spot rate. Given this information, interest rate parity exist, and the U. S. firm lock in a lower financing cost by borrowing pounds for one year.

a. does; couldb. does; could notc. does not; could notd. does not; could

Exercise 2-12 cost behavior; high-low method [lo2-3, lo2-4] speedy parcel service operates a fleet of delivery trucks in a large metropolitan area. a careful study by the company’s cost analyst has determined that if a truck is driven 120,000 miles during a year, the average operating cost is 11.6 cents per mile. if a truck is driven only 80,000 miles during a year, the average operating cost increases to 13.6 cents per mile. required: 1.& 2. using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (round the "variable cost per mile" to 3 decimal places.)