Question 1: The problem a. What is Pixonix home currency? The Canadian Dollar b. What is Pixonix exchange rate exposure? What are they concerned about? Canadian Dollar appreciates versus the US Dollar. They are concerned about the decline of the Canadian Dollar that is forecasted in the second half of the following year. Question 2: Scenario Analysis/Calculations (please state your assumptions to get full credit) Assume the following 3 possible exchange rate scenarios: i. USD/CAD
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is the currency risk faced by Pixonix. Currently one Canadian dollar is worth $1.0717 U.S. dollars‚ however there is considerable amount of uncertainty about whether or not the Canadian dollar will depreciate against the dollar in 2 months and 29 days. (2) Why is Cain so concerned by the current exchange rate fluctuation? The reason why Cain is so concerned by the current exchange rate fluctuation is because‚ if the Canadian dollar does depreciate‚ then the $7.5million U.S. obligation will become
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1 = Canadian Dollars‚ 2 = Mexican Pesos‚ 3 = English Pounds‚ 4 = Japanese Yen‚ 5 = French Francs” Input Type = “1”. “2”‚ “3”‚ “4”‚ or “5” Until Response = “1”. “2”‚ “3”‚ “4”‚ or “5” End Get_int_value module Repeat Write “Enter US currency in dollars.” Input USD Until USD >0.01 End Convert currency module Set CDXRate = 1.4680 Set MPXRate = 9.5085 Set EPXRate = 1.6433
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competitors face reduced costs when the Yen is depreciating. Also‚ with increasing profit margins‚ end-price to consumer can be lowered and lead to gain in market share for Japanese competitors. Research had shown that a 10 Yen appreciation to the dollar reduces operating profit by $4 billion 2. How important is GM’s competitive exposure? GM’s competitive exposure to yen derives from the yen’s effect to GM’s competitors. That is‚ with the expectation of a depreciation in Japanese yen‚ the
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is their only international distributor is it safe to believe most of Frays sales are done in Canada and in Canadian dollars. Additionally‚ labour‚ materials and all other cost associated with production along with managerial cost are also done in Canada and most likely denominated in Canadian dollars. Based on these two primary indicators we have to considering the Canadian dollar as the functional currency. The first step to understanding the accounting implication of the MI transaction is to
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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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