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Foreign Exchange Rates

MCQ: Business combinations, major customer, foreign currencies

#3. Principles for allocating the cost of a business combination re provided in SFAS 141, "Business Combinations.: When the fair value of a net assets acquired exceeds the total cost of the investment, the difference should be: a. Applied pro rata to reduce, but not below zero, the amounts initially assigned to specific no

International Business: Import & Export Product, Exchange Rates

You are the international manager of a US business that has just invented a revolutionary new personal computer that can perform the same functions as PCs, but costs only half as much to manufacture. Your CEO has asked you to decide how to expand into the European Union market. Your options are to export from the United States t

Finances and Currency Exchange Rates

1. Under the parent company concept, which of the following statements is true? A) Holding control of a subsidiary provides the parent with an indivisible interest in that company. B) Consolidated financial statements are produced primarily for the benefit of the parent company stockholders. C) The parent company concept i

Revaluation of the Yuan

From the perspective Chinese government should they accelerate an upward revaluaton of the Yuan (Renminbi)? Yes or no and why.

Accounting Concept Definitions

1.Under the parent company concept, which of the following statements is true? A)Holding control of a subsidiary provides the parent with an indivisible interest in that company. B)Consolidated financial statements are produced primarily for the benefit of the parent company stockholders. C)The parent company concept is

Multiple Choice & Finance Problems

11. Which of the following is not an advantage of a private placement (as compared to a public offering)? a. Greater financing flexibility b. Lower flotation costs c. Lower interest costs d. Quicker availability of funds 12. The demand for funds by the federal government puts upward pressure on interest rates ca

Solution to "Global Business Environment" question

Prepare a 700 word paper in which you conduct a country risk analysis for your selected global business venture (SEELING BOOKS IN BRAZIL). Analyze the following risks in your paper: o Political, legal, and regulatory risks o Exchange and repatriation of funds risks o Competitive risk assessment o Taxation and

Ch 17: Exchange Rates, spot prices, indirect quotes, arbitrage, cross rates

Please find the information in the attachment. Show all formulas and calculations and send in a word or excel document. 17-1. (Spot exchange rates) An American business needs to pay (a) 10,000 Canadian dollars, (b) 2 million yen, and (c) 50,000 Swiss francs to businesses abroad. What are the dollar payments to the respecti

Swap Contracts to Eliminate Currency Risk

Suppose you are a consultant living in the United States and have been engaged by a French company to perform a market study, which should take 18 monthes to complete. They are planning to pay you 100,000 francs monthly. The current exchange rate is $0.20 per franc. You are concerned that the French Franc will strengthen versus

Financing Foreign Operations in Thailand or Ghana

A service organization is considering expansion to Thailand or Ghana. An initial country risk analysis for each country must be conducted. What is Thailand's economic exposure? What is Ghana's economic exposure?

Financing Foreign Operations: United Airlines in Japan with yen debt

United Airlines recently inaugurated service to Japan and now wants to finance the purchase of Boeing 747s to service that route. The CFO for United is attracted to yen financing because the interest rate on yen is 300 basis points lower than the dollar interest rate. Although he doesn't expect this interest differential to be o

Spot Echange Rates

Canada-dollar Spot .8437 30-day .8417 90-day .8395 Japan-yen Spot .004684 30-day .004717 90-day .004781 Switzerland-franc Spot .5139 30-day .5169 90-day .5315 (Spot exchange rates) An American business ne

Exchange Rates Calculations

New Zealand-dollar Spot .8437 30-day .8417 90-day .8395 Japan-yen Spot .004684 30-day .004717 90-day .004781 Switzerland-franc Spot .5139

Spot Exchange Rate; cross rate between dollars and euros.

Please show in steps for clarity. In Britain, 90 day investments have a 4 % annualized return. In the US, 90 day investments of similar risk have a 1% annualized return. In the 90 day forward market, 1 British pound equals $1.66. Also, 1 British pound equal 1.16 Euros. a. If interest rate parity holds, what is the spot exc

Computing and Settling Acts Receivable in Foreign Currency

Prepare journal entries for the following: Items sold for 60,000 Singapore Dollars. The exchange rate on December 20 was $0.476 per Singapore Dollar. The purchase terms were n/30. On December 31 the exchange rate was $0.480 per Singapore Dollar. On January 17 payment was received for the December 20 sale. The exchange rate

Exchange rate used for translation

Darron Co. was formed on January 1, 2007 as a wholly owned foreign subsidiary of a U.S. corporation. Darron's functional currency was the stickle (§). The following transactions and events occurred during 2007: Jan 1 Darron issued common stock for §1,000,000 June 30 Darron paid dividends of §20,000 Dec 31 Darron reporte

Assuming a forward contract was not entered into, what would be the net impact on Car Corp.'s 2006 income statement related to this transaction? Assuming a forward contract was entered into, what would be the net impact on Car Corp.'s 2006 income statement related to this transaction?

Car Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2006, with payment of 10 million Korean won to be received on January 15, 2007. The following exchange rates applied: Date Spot Rate Forward Rate to Jan 15th Dec 16/06 $.00090 $.00098 Dec 31/06

Risks in International Markets

What are different risks that investors face when investing in international markets? How can investors minimize or eliminate these risks?

International Finance: Exchange Rate in the Forward Market

In the spot market, 1 U.S. dollar equals 1.68 Canadian dollars. Six month Canadian securities have an annual return of 12%. Six month U.S. securities have an annualized return of 7.5%. If interest rate parity holds, what is the U.S. dollar-Canadian dollar exchange rate in the 180-day forward market?

Forecasting Exchange Rate

Blade Inc, is U.S Based manufacturer of roller blade, has 3 years contract to export to Thailand. Blades will also import certain component from Thailand (10 PCT OF REVENUE IS GENERATED FROM THAILAND, 10 PCT OF ITS COST IS GOODS SOLD IN THAILAND).Economic conditions in Thailand is being unfavorable. The technical forecast indica

Projected gains and losses -exchange rate, break even

I need help with question #3.... 3. Ignoring taxes, what are S&S Air's projected gains or losses from this proposed arrangement at the current exchange rate of $1.20/?? What happens to profits if the exchange rate changes to $1.30/?? At what exchange rate will the company break even? S&S AIR GOES INTERNATIONAL -Case Info

Advantages of Fixed and Flexiable Exchange Rate Systems

1. A. What are the alleged advantages of a fixed over a flexible exchange rate system? How do advocates of flexible exchange rates respond? B. What overall conclusion can be reached on whether flexible or fixed exchange rates are preferred? 2. What is meant by a crawling peg system? How can such a system overcom

Asset Classes (TD Ameritrade and the Dow 30)

Asset Classes are new & quite confusing to me. I have to write an 800 word essay which I determine the asset classes for the mutual fund - TD Ameritrade and the Dow 30 organization - Wal-Mart. In the paper, I must also explain how classifications of TD Ameritrade mutual fund, Wal-Mart, and the current investment environment impa

Integrative Problem/Reducing Exchange Risk.

For your job as the business reporter for a local newspaper, you are given the assignment of putting together a series of articles on the multinational finance and the international currency markets for your readers. Much recent local press coverage has been given to losses in the foreign exchange markets by JGAR, a local firm t

An American business pays $10,000, $15,000, and $20,000 to suppliers in, respectively, Japan, Switzerland, and Canada. How much, in local currencies, do the suppliers receive? Set up an arbitrage scheme with your capital. What is the gain (loss) in dollars?

Country Contract $/Foreign Currency Canada-dollar Spot .8437 30-day .8417 90-day .8395 Japan-yen Spot .004684 30-day .004717 90-day .004781 Switzerland Spot .5139 30-day .5169 90-day .5315 Question 1. (Spot exchange rates) An American business pays $10,000, $15,000, and $20,000 to suppliers in, respect