Sunland Co. at the end of 2017, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $1410000 Estimated litigation expense 3050000 Installment sales (1880000) Taxable income $2580000 The estimated litigation expense of $3050000 will be deductible in 2019 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $940000 in each of the next two years. The estimated liability for litigation is classified as noncurrent and the installment accounts receivable are classified as $940000 current and $940000 noncurrent. The income tax rate is 30% for all years. The deferred tax liability to be recognized is
$1479000.
$564000.
$282000.
$774000.

The east asiatic company (eac), a danish company with subsidiaries throughout asia, has been funding its bangkok subsidiary primarily with u.s. dollar debt because of the cost and availability of dollar capital as opposed to thai baht-denominated (b) debt. the treasurer of eac-thailand is considering a 1-year bank loan for $247,000.the current spot rate is b32.03 /$, and the dollar-based interest is 6.78% for the 1-year period. 1-year loans are 12.04% in baht.a. assuming expected inflation rates of 4.3 % and 1.24% in thailand and the united states, respectively, for the coming year, according to purchase power parity, what would the effective cost of funds be in thai baht terms? b. if eac's foreign exchange advisers believe strongly that the thai government wants to push the value of the baht down against the dollar by5% over the coming year (to promote its export competitiveness in dollar markets), what might the effective cost of funds end up being in baht terms? c. if eac could borrow thai baht at 13% per annum, would this be cheaper than either part (a) or part (b) above?