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Foreign Exchange Rates

Financial Management Solutions

Show all work in arriving at the solutions requested. 1. The Wall Street Journal reported the following spot and forward rates for the Swiss franc: Spot $0.7876 30-day forward '$0.7918 90-day forward '$0.7968 180-day forward '$0.8039 a. Was the Swiss franc selling at a discount or a pr

Risks and Returns

13-6 UBC Company fixed costs are $10,000 per year and variable costs are $20 per unit. Sales price is $28 per unit. a) What is the contribution margin of the product? Answer: $8.00 b) Calculate the breakeven point in unit sales and dollars. Answer: Breakeven in units is 1,250 Breakeven

Vogl Company Exchange Rate Risk Management

Vogl Company is a U.S. firm conducting a financial plan for the next year. It has no foreign subsidiaries, but more than half of its sales are from exports. Its foreign cash inflows to be received from exporting and cash outflows to be paid for imported supplies over the next year are shown in the following table: Currency

Foreign Exchange and Global Finance: Purchasing Power Parities

Discuss the theoretical perspectives of PPP and empirical evidence in testing PPP. To what extenet PPP may or may not hold in the real world? To what extent does it hold in the real world? Please provide various of factors that contribute to the departure from PPP. For relative PPP, you may collect the price indexes in t

Exhange rate problems

1) Speculation. Diamond Bank expects that the Singapore dollar will depreciate against the dollar from its spot rate of $.43 to $.42 in 60 days. The following interbank lending and borrowing rates exist: Lending Rate Borrowing Rate U.S. dollar 7.0% 7.2% Singap

Expansion abroad

Develop a proposal for a US company selling consumer electronics that wants to expand to South Korea. Include an economic assessment of the country, a risk mitigation plan, a financing plan and a concluding recommendation. 636 words

Exchange Rate Behavior

Hello! I need to have a references. I need to have 200 words per question. Thanks! 1. As an employee of the foreign exchange department for a large company, you have been given the following information. Beginning of Year Spot rate of £ = $1.596 Spot rate of Australian dollar (A$) = $.70 Cross exc

Smart method of goal setting

Discuss a creative process on the SMART method of goal setting. Consult with outside sources but no internet sources. Coaching in Business Wallas' Problem Solving Creative Analysis Creative Problem Solving Design Methods Evolutionary Systems Design Futuring Goal Setting Heuristics Kepner/Tregoe

Congratulations, you just won the Irish Lottery!

Congratulations, you just won the Irish Lottery! You bought a ticket while you were on vacation in Ireland, and your winnings amount to 1 million euros after all taxes were taken out. 1. If the current exchange rate is US$1 equals â?¬ .70, how much did you win in US dollars? 2. Suppose that the interest rate in Irish banks

Newport's pricing policy

Assume the same facts as in Newport Lifts (A). Additionally, financial management believes that if it maintains the same yuan sales price, volume will increase at 12% per annum for eight years. Dollar costs will not change. At the end of ten years, Newport Lift's patent expires and it will no longer export to China. After the yu

In terms of currency denomination, discuss how IBM prices its revenues and costs. What means do they use to hedge against exchange rate risk? What do you think would be the effect of increases/decreas

In terms of currency denomination, discuss how IBM prices its revenues and costs. What means do they use to hedge against exchange rate risk? What do you think would be the effect of increases/decreases in the dollar's exchange value on the firm's profitability? The response addresses the queries posted in 1784 words with re

The Dollar demand relative to the Pound; value of imports and exports

Let the exchange rate be defined as the number of dollars per British pound. Assume there is an increase in U.S. interest rates relative to that of Britain. a) Would this event cause the demand for the dollar to increase or decrease relative to the demand for the pound? b) Has the dollar appreciated or depreciated in v

Strategy for production information; foreign rates

Case: The Swiss pharmaceutical global corporation Hoffman-La Roche has made a major breakthrough in the relief of a serious disabling disease that affects 3 percent of the world's population. Its new product, Tigason, is the first product that effectively controls severe cases of psoriasis and dyskeratoses, skin disorders that

Global Business Management: Issues in China

- Research the country (China) - Identify the ultimate monetary authority in China (comparable to the Federal Reserve in the U.S., the Bank of England in the UK, etc.). - identify the key monetary aggregates and interest rates that affect economic performance in China. - Evaluate how the key monetary aggregates and i

Computing Foreign Currency Translation for Financial Statements

See attachment. Ginvold Co. began operating a subsidiary in a foreign country on January 1, 2007 by acquiring all of the common stock for §50,000. This subsidiary immediately borrowed §120,000 on a five-year note with ten percent interest payable annually beginning on January 1, 2008. A building was then purchased

Foreign Currency Exchange: Yen to USD. Discuss a hedge using options

You are in corporate treasury and the company has a foreign subsidiary in Japan. The Japanese subsidiary's earnings are in yen and each quarter corporate must translate those earnings to dollars. You are beginning a new quarter and are concerned about the volatility in the yen/$ exchange rate and its possible adverse effect on t

Global finance questions

I need help with the following questions. ABC, Inc. is a MNC based in the US. It has subsidiaries in Germany, Japan and Mexico. The subsidiaries sell consumer products on their local market and do their accounting using the local currency. The products they are selling are manufactured by ABC, Inc in the US, which, of course,

Direct foreign exchange rates in U.S. dollars

I need help completing the following exercises. I am going crazy looking for examples, etc. Please help me. Attached are the exercises. Thank you. Exercises: 1. On January 1, 20X9, Long Corporation purchased 60 percent of Shortway Company's common stock and recorded the following entry: Investment in

Translate RoadTime's trial balance from Swiss francs to dollars

Please see attachment for RoadTime's December 31, 20X1, trial balance in SFr. On January 1, 20X1, Popular Creek Corporation organized RoadTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 60,000. Additional Information 1. The receivable from Popular Creek is denominated i

Translation of foreign currency financial statements

Foreign Currency Financial Statements Financial Statement Translation Prepare financial statements for a foreign subsidiary and then translate them into U.S. dollars. The first item has been completed for you as an example. Fenwicke Company Subsidiary Income Statement LCU U.S. Dollars

International Taxation National Exporters

Can you help me get started with this assignment? Problems: 1. National Exporters, Inc is a US corporation that sells throughout Europe but has no branches in any country. National Exporters uses the accrual method of tax accounting. During year 1, the corporation began to export to Japan. It opened a bank account with a Tok

Exchange Rate Risk

Please explain in simple terms as this is for my own understanding. I am trying to understand exchange rate risk. Following is a yen to US dollar conversion table. Jan.1993 124.73 Feb. 118.25 Mar. 114.88 Apr. 111.05 May 107.08 June 106.50 In this scenario, is the dollar depreciating against the yen? In this scena

Financing Decision: Financing a Czech Investment

Cuanto Corp. is a U. S. drug company that has attempted to capitalize on new opportunities to expand in Eastern Europe. The production costs in most Eastern European countries are very low, often less than one- fourth of the cost in Germany or Switzerland. Furthermore, there is a strong demand for drugs in Eastern Europe. Cuanto

Foreign Exchange

1. In a U.S. news paper, there is a quotation "Norway (Krone) U.S. $ equiv. 0.1601". What does that mean? (answer briefly). 2. If you are an American, and you agree to pay 100 Euro to another person in 6 months, who bears the currency fluctuation risk----you or the person you will pay? Why?

Allocation, amortization, equity, adjustments

On January 1, 20X1, Par Company purchased all the outstanding stock of North Bay Company, located in Canada, for $120,000. On January 1, 20X1, the direct exchange rate for the Canadian dollar (C$) was C$1 _ $.80. North Bay's book value on January 1, 20X1, was C$90,000. The fair value of North Bay's plant and equipment was C$10,0