if they expect the dollar to depreciate versus the yen during the next three months? Use the information provided in Exhibit 10. 3. Suppose that OSG undertakes the same mandatory hedging policy as S. Corporation‚ the American company whose minimum forward-cover schedule is shown in Exhibit 9. Apply this schedule to the US$1 million account receivable case for OSG and find the expected total end-of-period value of the position taken by OSG. OSG expected to receive a US dollar (foreign currency) payment
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Amount in US$ 100‚000.00 103‚780.00 100‚040.00 82‚290.00 Adjustment 0 3‚780.00 40.00 (17‚710) Factor (US) 1.2034** 1.1656 1.1652 0.9881 Rounding and with 4 decimal places. **Notice that a Canadian dollar buys only .830979 cents of US dollar. Hence‚ to get what $1 buys in Canadian dollars you need to go from the Direct vs indirect quote: === 1.2034 = .1/.83098. The difference between rates will determine the
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paid the packaged in Canadian dollars‚ but the hotels all these destination would accept payment in U.S. dollars only. As a consequence‚ VS faced foreign exchange risk on their operating business. The major concerns facing VS was the impact that changes in the Canadian dollar‚ it meant the company’s ability to pay its supplier. Therefore‚ the president in this company thought much how to deal with the U.S. dollars obligation. If the current exchange Canadian dollar appreciated from 0.6940 – 0.6298
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Chinese suppliers figure out a way to detect and reject contaminated honey. Its current cost for 50-50 blend of Chinese and Canadian honey is $1.08 Canadian dollars per pound. Harrington Honey has proposed three main options: a) 100% pure Canadian honey‚ which costs $1.75/lb; b) 100% U.S. honey at $1.10/lb in U.S. dollar ($1.79 Canadian dollar); or c) 50-50 Canadian-Argentinean honey for $1.42/lb. As a result of the supply shortage‚ prices for non-Chinese honey have gone up significantly. There are
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capitalization of 200 million dollars. The leading product of Aspen is Aspen Plus; we have to note that 48 % of sales were stemming from this product in 1995. The company gives great significance to R&D as the customers commitment depends on the development of Aspen’s current products. In 1995‚ 11.4 million dollars was dedicated to R&D. There is a factor of foreign currency expense as 20% of the total R&D expense was denominated in British pounds; the rest was in U.S dollars. Aspen enjoys a collection
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Motors’ corporate hedging policies‚ its risk management structure‚ and how accounting rules impact hedging decisions. The company is considering deviations from prescribed policies because of two significant exposures: an exposure to the Canadian dollar with adverse accounting consequences and an exposure to the Argentinean currency when devaluation is widely anticipated. Students must evaluate the risks General Motors faces in each situation and consider which hedging strategy - if any - might be
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1. What is the price of the Brazilian Real in terms of US Dollars? What is the price of the US Dollar in terms of Brazilian Real? 1. US0.4912/BR 2. BR2.0358/US 2. Did the Australian Dollar appreciate or depreciate against the US dollar from Tuesday to Wednesday? A: Appreciate 3. What is the cross rate for the Brazilian Real in terms of Mexican Peso? 0.0751/0.4912=BR0.15289/MP 4. A bank provides the following quotes: Real0.15021/Mexican Peso and Real0.004143/Chilean Peso. Which of these
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assets‚ she expected this would be largely financed out of cash flow-if margins did not deteriorate further and working capital could be kept in line with sales. -One of the things that continued disturb her was the volatility of the yen and Taiwan dollar as over half of the equipment sold in the PC‚ TV‚ VCR‚ and Hi-fi product lines were imported from Japanese supplier. 1. A volume of about $20 million
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These variables are given to us to investigate if there is a positive relationship between the variables. Plan: The two variables that I will be looking at are the gross profit (the amount of money of US dollar that the film made in the US) and the budget (the amount in millions of US dollar that was spent in making the film). With these two variables I am going to investigate if there is a positive relationship. It seems logical to investigate the relationship between the gross profit and the
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on currency movements. POINT: if the dollar is strong (weak)‚ French wine is cheaper (more expensive) for an American. The value of the $ in relation to the € will affect the price of foreign goods for an American. When the dollars appreciates‚ foreign goods/assets/services are CHEAPER. When the dollar depreciates‚ foreign goods/assets/services are MORE EXPENSIVE. SUMMARY of the Advantages/Disadvantages of a Strong/Weak Currency: 1. Strong dollar = Weak foreign currency: a. Advantages:
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