1. Papa Roach Exterminators, Inc., has sales of $644,000, costs of $225,000, depreciation expense of $50,000, interest expense of $17,000, and a tax rate of 35 percent. What is the net income for firm?
2. How do forward markets reflect expectations of future spot rate? How do spot and forward markets align with interest rate and expected inflation differentials? What is uncovered interest arbitrage? Can balance of payments dynamics explain exchange rate movements?