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Foreign Exchange Rates

Translation of Foreign Currencies

All asset and liability accounts of foreign subsidiaries and affiliates are translated into Japanese yen at approximate year-end current exchange rates and all income and expense accounts are translated at exchange rates that approximate those rates prevailing at the time of the transactions. The resulting translation adjustment

Spot and Forward Prices

A. Illustrate the concept of "Spot-Forward pricing parity" relationship with a numerical example. B. What are the implications of this for Foreign Exchange Market?

Risk Proposal for Investment

Your corporation has an opportunity to make a major investment in China of $100 million to develop an offshore manufacturing facility. When this plant is fully developed and becomes operational in two years the corporation can close down its current manufacturing facility in the United States and shift operations to China. At pr

Longhorn Purchases Its Materials in the Phillipines

Longhorn a company based in Mexico but purchases its materials in the Philippines. If the peso strengthens what effect will this have in terms of economic exposure? Will they be at a competitive disadvantage or advantage and why?

specific tools to reduce exchange rate risk

At the next finance department staff meeting, the CFO asked you to lead a discussion on the use of one specific tool to reduce exchange rate risk?a currency swap (The others are forward contracts and futures contracts.). He asked you to cover the following questions: -What would be a typical example where your company engaged

CFO of a mid-sized company that exports to Europe Assume the role of a CFO of a mid-sized company that exports to Europe. Your company received a contract to supply components to a German manufacturer. Discuss the various approaches available to help you accurately forecast exchange rates. Identify the implications of exchange-rate changes on the company's marketing, production, and financial decisions. Please include references and citings if possible.

Assume the role of a CFO of a mid-sized company that exports to Europe. Your company received a contract to supply components to a German manufacturer. Discuss the various approaches available to help you accurately forecast exchange rates. Identify the implications of exchange-rate changes on the company's marketing, production

Suppose you are offered a savings account with an annual percentage rate of 4%

Suppose you are offered a savings account with an annual percentage rate of 4%. The effective annual rate will be? Suppose you invest in property with a perpetual cash flow. At the end of the first year you will receive $100 but the return will fall by 5% a year so that the second year's payment will be $95. If this 5% declin

Predicting Exchange Rates

Dorchester Inc. has asked you to help forecast exchange rates for the three potential countries you have selected for your proposal. First plot exchange rates from the past year and try to identify patterns that can be projected into the future. What exchange rates do you predict for 1 year from now? 1. China 2. Malaysia

Journal Entries for Foreign Transactions

USA Posh Puppies has the following foreign transactions during 20X8: -USA Posh Puppies purchased 10,000 collars on December 2 from Bling and Things, Inc., a firm based in Mexico, at an invoice price of 7,500 pesos. The pot rate was $0.064. Payment is due January 2, 20X9 -USA Posh Puppies sold 1,000 rhinestone-studded collars

What is the impact on importers to the U.S. from the EU?

If the exchange rate of the dollar and the Euro goes from one Euro equals $1.42 cents in 2011 to one Euro equals $1.30 in 2012, has the dollar strengthened or weakened and why? If this happens, what is the impact on importers to the U.S. from the EU and on exporters from the U.S. to the EU?

Company Financial Analysis

Analyse the financial situation of Lindt & Sprüngli. Concentrate hereby on the following topics: 1. The cost of capital of the company in relations to its profits. 2. The capital structure. 3. The investment activities of the company over the last three years. 4. The working capital management 5. The effect of excha

Environmental Analysis

Applebaum Trucking was founded after World War II in Akron, Ohio. The growth of the company in the early days was the result of an increased demand for carrier services from factories in the Midwest to ports on the East Coast for shipments to Europe. Over the years, Applebaum Trucking has been steadily forging relationships with

Find the 3 errors in formulation

Refer to the spreadsheet attached. This file contains a formulation of the Everglad problem. However, three errors are included in this formulation. In particular, try different trial values for which you can predict the correct results, use the toggle to examine all of the formulas, and use the auditing tools to check precedenc

Historical exchange rates

Using published sources ( for example, The WSJ, Barron's, Federal Reserve Bulletin), look up the exchange rate for U.S dollars with Japanese yen for each of the past 10 years (you can use an average for the year or a specific time period each year). Based on these exchange rates, compute and discuss the yearly exchange rate effe

Exchange Rates & IMF

1. Why might the IMF be called the "lender of last resort"? What are three of the tools they use for establishing economic stability in a country? 2. Which is more conducive to international trade, the fixed or the floating exchange rate? Why? 3. Choose one of the World Bank's present projects (from the website) and

International Taxation

Sample of included problems: (There are a total of 54 problems, all correct answers are given) ... 1) GreenCo, a domestic corporation, earns $25 million of taxable income from U.S. sources and $5 million of taxable income from foreign sources. What amount of taxable income does GreenCo report on its U.S. tax return? A) $25

Exchange Rate Questions

1. A U.S. institutional investor would like to purchase 10,000 shares of Lafarge, a French firm that trades on the Paris Bourse, the London stock exchange, and the NYSE as an ADR. At the NYSE, one depositary receipt is equivalent to one-fourth of a Lafarge share. The U.S. investor asks its brokers to quote net prices, without an

International exchange problem

1.) One year zero coupon US selling $950.57 and UK938.97, both face value 1000 ($1,000 in US, 1,000 in UK). Spot ex rate is $2.0609/bp and one year forward rate is $2.0403/bp a) Calculate one yr interest rates in US and U.K b) Calculate & report 1 year forward discount (%) or premium (%) for BP c) Interest rate parity holding

Exchange rate - find article

The concepts is: -Exchange Rate Find a related article at Bloomberg. You can try their home page at http://www.bloomberg.com/ and use the search function there please. You will find one (or several articles) to analyze. Remember to focus upon your selected concept in your analysis.

Finance: The Big Mac Index

The most recent Big Mac Index can be found at the following web address: http://www.economist.com/market/bigmac/index.cfm. Incorporate answers to the following questions in a well crafted essay response including supporting evidence for the discussion. (APA format) 1) Briefly discuss the history and purpose of the big Mac