Case Study BLADE INC. CASE Submitted to Riyashad Ahmed(RyA) FIN-444 Sec-3 Submitted by Antu Biswas 102 0044 030 BLADE INC. CASE 1. What are the advantages Blades could gain from importing from and/or exporting to a foreign country such as Thailand? Ans: The advantages Blades could gain from importing from and/or exporting to Thailand could be Decrease their cost of goods sold‚ and increase Blades’ net income since rubber and plastic are cheaper when imported from a foreign country
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BLADES‚ INC. CASE Assessment of Future Exchange Rate Movements As the chief financial officer of Blades‚ Inc.‚ Ben Holt is pleased that his current system of exporting “Speedos” to Thailand seems to be working well. Blades’ primary customer in Thailand‚ a retailer called Entertainment Products‚ has committed itself to purchasing a fixed number of Speedos annually for the next 3 years at a fixed price denominated in baht‚ Thailand’s currency. Furthermore‚ Blades is using a Thai supplier for some
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Overview Blades‚ Inc.‚ is a USA based company that has been in corporate in the United States for three years. Blade relatively is a small Company‚ with total assets of only $200 million. The company produces only a single type of roller blade. Ben Holt the CFO of the Blades Inc. Financial Information Total assets of was only $200 million and first year net income of $3.5 million. Return on asset is 7%. It stock price has fallen from high of $20 per share three years ago to $12
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James D’Elia FN 316 International Financial Management Professor Dunbar Case #3 Blades Inc. Chapter 5 1) If Blades used call options to hedge its Yen in payables‚ they are presented with 2 options. They can hedge at a lower exercise price (.00756) with a higher premium (2%); of they can hedge at a higher exercise price (.00792) with a lower premium (1.5%). Traditionally‚ the premiums are normally 1.5%‚ however due to recent uncertainty they have risen. This presents a tradeoff between an exercise
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Study on the Competitiveness of the European Steel Sector Within the Framework Contract of Sectoral Competitiveness Studies – ENTR/06/054 Final report‚ August 2008 Client: Directorate-General Enterprise & Industry ECORYS SCS Group P.O. Box 4175 3006 AD Rotterdam Watermanweg 44 3067 GG Rotterdam The Netherlands T +31 (0)10 453 88 16 F +31 (0)10 453 07 68 E fwc-scs@ecorys.com W www.ecorys.com Registration no. 24316726 Table of contents Executive summary...........................
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Case Problem: Blades‚ Inc. 1. One point of concern for you is that there is a tradeoff between the higher interest rates in Thailand and the delayed conversion of baht into dollars. Explain what this means. ANSWER: If the net baht-denominated cash flows are converted into dollars today‚ Blades is not subject to any future depreciation of the baht that would result in less dollar cash flows. 2. If the net baht received from the Thailand operation are invested in Thailand‚ how will
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Get an answer from tutors to this homework question now: Chapter 5 Blades‚ Inc. Case Use of Currency Derivative Instruments Blades‚ Inc. needs to order supplies 2 months ahead of the delivery date. It is considering an order from a Japanese supplier that requires a payment of 12.5 million yen payable as of the delivery date. Blades has two choices: Purchase two call options contracts (since each option contract represents 6‚250‚000 yen). Purchase one futures contract (which represents 12.5 million
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Abstract Blades‚ Incorporated has been exporting to Thailand since its decision to supplement its declining U.S. sales. This decision seems ideal due to the Southeast Asia fast growing economies. With this in mind‚ this paper will analyze the Blades‚ Inc. case in Chapter 5 of the textbook by discussing the feasibility for Ben Holt‚ the chief financial officer‚ to move forward to hedging Blades’ yen payables position‚ the advantages and disadvantages associated with purchasing derivatives instruments
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International Flow of Funds - Blades PLC Case Study Ben Holt‚ the finance director of Blades plc‚ has decided to counteract the decreasing demand for “Speedos” roller blades by exporting this product to Thailand. Furthermore‚ due to the low cost of rubber and plastic in Southeast Asia‚ Holt has decided to import some of the components needed to manufacture “Speedos” from Thailand. Holt feels that importing rubber and plastic components from Thailand will provide Blades with a cost advantage (the components
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Case Study: Blades‚ Inc – Assessment of Purchasing Power Parity Summary: Blades Inc‚ a US based company that manufactures roller blades‚ is currently importing from and exporting to Thailand. The decision to work with Thailand resulted from the realization that there were little to no foreign or Thai competitors and Thailand’s potential growth as a country was on the rise. As a result Blades entered into an agreement with Entertainment Product‚ a Thai retailer‚ for an annual purchase contract
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