A Company Producing Apps for a Social Networking Site Is

question 87

Essay

A company producing apps for a social networking site is deciding which path to pursue.The first is to create an app that has universal appeal but faces a crowded market.This app,A,would have sales of 100,000 copies at $1 each under ideal conditions,but under tough conditions would have sales of only 60,000 copies at $.80 each.The other app,B,would have sales of 500,000 units at $.50 each under ideal conditions but sales would be reduced to 10,000 units at $.50 each under tough conditions.If ideal and rough conditions occur with the same frequency,which app should the company produce? Note: both apps cost the same amount to develop.

Understand how to calculate the impact of exchange rate changes on the financial statements of companies engaged in foreign transactions.

Identify the components of, and prepare, journal entries related to foreign currency transactions and adjusting entries at year end.

Determine the correct reporting of inventory and cash balances affected by foreign currency translation in the balance sheet.

Assess the effect of foreign exchange rates on costs of goods sold and income statements.

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Definitions:

Developed Countries

Nations with highly advanced economies, significant industrial activity, and high living standards.

Mortality

The incidence of death within a population.

Literacy Rate

Literacy rate refers to the percentage of people within a population that can read and write at a specified age.

Agriculture

Agriculture is the practice of cultivating soil, producing crops, and raising livestock for food, fiber, and other products.