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International Finance

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,

Multiple Choice - Various

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, whic

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

International Finance Problem: The Interest Rate Parity formula

The current spot rate is Ringett 2.5/SF. The expected spot rate in one year is Ringett 2.8/SF. The current Swiss interest rate is 8%. What Malaysian interest rate will cause IFE to hold? The correct answer is 12.32%. I left this problem blank because I followed this formula: S1-S2/S2 = i$-iyen/1+iyen (Note the Yen and

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: http://aboutmcdonalds.com/mcd/investors/public

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

Foreign currency hedge, existing receivable

On April 1, 2006, Baylor Corporation delivers merchandise to Rameau Corporation for 200,000 pesos when the spot rate for pesos is 6.0496 pesos. The receivable from Rameau is due May 30. Also on April 1, Baylor hedges its foreign currency asset and enters into a 60 day forward contract to sell 200,000 pesos at a forward rate of

Firm purcahse commitment, foreign currency hedge

On November 2, 2006, Import Bazaar, a US retailr, ordered merchandise from Matsushita Co. of Japan. The merchandise is to b delivered to Import Bazaar on January 30, 2007 at a price of 1,000,000 yen. Also on Novmber 2, Import Baazar hedged the foreign currency commitment with Matsushita by contracting with its

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

Standard Deviation and Foreign Exchange

Need help with understanding each of these questions. The standard deviation statistic measures the degree of movement for EACH currency. Is this true or false. I know SD statistic measures currency variability but not sure for each currency. A spot foreign exchange transaction does not take place at a specific future date

Quicker is expected to make a 400,000 yen sale to Japanese

Can you help me get started on this assignment? In evaluating the acquisition, Ruth and Bob are a little concerned. Quicker is expected to make a 400,000 yen sale to a Japanese company with credit terms of net 150 days. The yen has been falling against the dollar, so they are expecting a loss. Write a memo with the followi

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

Types of Bonds

A Japanese company issues a yen-denominated bond in Australia a. What type of bond is that? Foreign bond? Eurobond? International bond? - Explain! b. Provide a possible explanation why this kind of a bond might be beneficial to the Japanese company.

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

What is included in other comprehensive income?

What is included in other comprehensive income? Why are items included in other comprehensive income, but not included in net income? Should these items be included in net income, or not included at all? Explain your answer.

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?

Finance analysis

D. Analyze the effects of international portfolio diversification on an investment portfolio e. Examine alternative investment vehicles. f. Explain how the use of derivative securities can further enhance a portfolio's performance.

Major Types of Foreign Exchange Risks

What are the major types of foreign exchange risks? How are these risks hedged or mitigated... and what benefits do firms gain from hedging activities? Can you help me get started on this assignment?

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?