P&G is a US based MNC and has operations in Turkey. P&G expects 120,000,000 TRL cash flows in 6 months, however due to significant volatility, cash flows are expected to fluctuate as much as 20%. In other words P&G can get TRL120m, TRL96m or TRL144m depending on the economic conditions. Based on their expectations, P&G treasurers choose to sell TRL96m forward at TRL1.90and buy TRL48m put option at TRL1.90 both with six month maturities. The cost of the put option is $0.02. Assume that the spot exchange rate turns out to be TRL2.10/$ at the expiration and cash flows materialize as TRL144,000,000. What will the net USD cash-flows of P&G and what will be the cost of acquiring one US dollar?
a. 50,526,316 and TRL1.9000/$
b. 25,263,158 and TRL1.9200/$
c. 74,829,474 and TRL1.924/$
d. None of the above
Please pick the right answer and show the calculation.© BrainMass Inc. brainmass.com October 25, 2018, 5:25 am ad1c9bdddf
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ANSWER: d. None of the above ...
The following posting helps with calculations involving cash flow amounts and dollar aquisitions.
Balance Sheet Analysis
Obtain the latest annual report and accounts of a company of your choice.* Consult the Balance Sheet and determine the company's net asset value.
· What is the composition of the assets, i.e. the relative size of fixed and current assets?
· What is the relative size of intangible fixed and tangible fixed assets?
· What proportion of current assets is accounted for by stocks and debtors?
· What is the company's policy towards asset revaluation?
· What is its depreciation policy?
Now consult the financial press to assess the market value of the equity. This is the current share price times the number of ordinary shares issued. (The notes to the accounts will indicate the number of shares issued.)
· What difference do you find between the net asset value and the market value?
· How can you explain this?
· What is the P:E ratio of your selected company?
· How does this compare with other companies in the same sector?
· How can you explain any differences?
· Do you think your selected company's shares are under- or over-valued?
You chosen company MUST have a full listing on the London Stock Exchange.
You MUST attach to your coursework a copy of the latest annual report and accounts of your chosen company. (This does not contribute towards the word count.)
Your coursework should be no less than 1500 words and no more than 2500.
Ratio analysis as well as company valuation methods are required, along with a critical appraisal of the techniques used.