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International Finance

Hedging Strategy for Export Earnings using Options

See the attached file. A company finance director is expecting to receive US$2.1 million in export earnings in 90 days time. At that time she will need to purchase sterling. The spot rate is currently $1.35/£ but she anticipates that it may rise significantly before the earnings arrive. She believes that the best hedging opp

Forward Market and No Arbitrage Opportunities

Answer both questions A). The treasurer of a German firm has ?5 million to invest for three months. The annual interest rate in the Germany is 4 percent: the interest rate in the United Kingdom is 2 percent. The spot rate of exchange is ?1.1/£ and the three-month forward rate is ?1.2/£. Ignoring transactions costs, in which

Prepare journal entries; compute effect to net income

SECTION 2. FOREIGN CURRENCY HEDGE. On November 1, 2008, King Co. sold inventory to a customer in a foreign country. King agreed to accept 96,000 local currency units (lcu) in full payment for this inventory. Payment was to be made on February 1, 2009. On December 1, 2008, King pays $1,800 for a two-month option on 96,000 l

Bid-ask spreads for currency

Please help with the following problem. I need to learn about bid-ask spreads for currency, including how to calculate. Could you please show me how to do these using 2 countries: India and Brazil? Also could you include a summary on how the results could impact a company's decision globalizing their business to those co

Euro value accounts

Let me ask you all what I should do. In 2002, I sent $10,000. to my overseas account and had it converted to Euros. Let's say I did this in May of that year. What was the Euro value at that point of conversion? What is the Euro value today? Should I keep the money in Euros or convert it back to US $? (what is the

Apply Spot Exchange Rates

On November 1, 2011, Dos Santos Company forescasts the purchase of raw materials from a Brazilian supplier on February 1, 2012, at a price of 200,000 Brazilian reals. On November 1, 2011, Dos Santos pays 1,500 for a three month call option on 200,000 reals with a strike price of .40 per real. Dos Santos property designates the o

Currency Receivable Rates

Eximco Corporation (based in Champaign, Illinois) has a number of transactions with companies in the country of Mongagua, where the currency is the Mong. On November 30, 2011, Eximco sold equipment at a price of 500,000 mongs to a Mongaguan customer that will make payments on January 31, 2012. in addition, on November 30, 2011,

Post Company purchased a percent investment in Stake Company.

6. On January 1, 20X5, Post Company purchased an 80 percent investment in Stake Company. The acquisition cost was equal to Postâ??s equity in Stakeâ??s net assets at that date. On January 1, 20X5, Post and Stake had retained earnings of $500,000 and $100,000, respectively. During 20X5, Post had net income of $200,000, wh

McDonalds: Identify and evaluate issues in international financial management

McDonalds Co., which is an organization with international presence: Identify and evaluate contemporary issues in international financial management. APA format with 2 references and in text citations. Financial data for McDonalds may be found using the following link:

Free-Floating Currencies

The potential destabilization of an economy due to a free-floating currency must be a significant concern to any government, but especially in China where control is important for many reasons. Iâ??ve been struck by a comment in The Kiplinger Letter (April 30, 2010) that stated that the current crisis in Greece is caused, in

Capital Projects in Foreign Countries - Caribbean

1. Discuss a situation where a Capital Project in a foreign country with excellent business potential might not be to the advantage of the Parent. Discuss this from the standpoint of Cash Flow, Currency Convertibility, Repatriation, and other Country Risk Factors. 2. Select a topic of your choice relating to global business

Global Business Strategies: Global Financing

Needing assistance with an original discussion of the following: ? Explain hard and soft currencies ? Analyze hard and soft currencies in relation to global business strategies ? How are they used in global financing operations ? Describe importance of managing risks.

Quest Company has seen dramatic fluctuations in earnings

Quest Company began operations five years ago. The company produces and sells software. The company's primary market is in the United States, where 60% of sales occur. Ten percent of the company's sales occur in Japan and 30% of sales occur in Europe. Foreign sales are denominated in local currencies. Major software purchases ma


I need your kind opinion on the following two accounting treatments based on the relevant paragraphs from the IASs/IFRSs: 1- If we are having a group of assets dominated in a foreign currency and on daily basis these assets are getting revalued using the daily FX spot/closing rate and the difference goes to the FX P&L GL. T

Differences in Accounting Standards

See the attached file. Exhibit 9-1 Reconciliation of Non-U.S. GAAP to U.S. GAAP Unilever Group Excerpts from the 2006 Form 20-F Filed with the EC - Footnote No.34 34 Divergences From United States GAAP Unilever's consolidated accounts are prepared in acc

Currency Risks for Japanese Exporters

Looking for help in approaching the following problem: You are a Japanese exporter. You have just made two shipments of your product; one to the U.S. (for which you will be paid in USD in 60 days) and one to China (for which you will be paid in CHY in 60 days). The USD floats against the JPY and the CHY is pegged to the USD. D

Calculate actual payment given situation

Steps to solve the following problem... You are a U.S. importer from France. You committed to paying ?100,000 to your French supplier on May 31. You decided to hedge against this foreign currency liability by entering long one euro futures contract. Unfortunately, the closest that you can come to May 31 is the JUN contract with

Regular and Irregular items on an Income Statement

What are the differences between regular and irregular items on an income statement? What are the requirements for items to qualify as irregular? What are some examples of these irregular items? What is the affect of irregular items on an investor's analysis of a company?

International Accounting Standard Problems

Please help answer the following questions. Include references. What are at least three International Accounting Standards (IASs)? Are these standards the same as U.S. standards? Why or why not? Is it necessary to have global standards? Why or why not?

banking deregulation in the economy

Request assistance with graduate level research: MS word document, with APA citing in text and references, addressing the following issues: Would banking deregulation be good for consumers as well as the economy in general? Other issues that should be addressed include: What is the purpose of the main banking regul

Capital Structure Discussion

Guidelines for the answer ( 5.1 to 5.11 need to be answered taking into consideration the guidelines given below 1. A Contents page showing clearly the page number and /contents of each page of your project. 2. An executive summary showing the most important findings and research which was covered in the discussion. 3. A