Determining the exchange rate risk

Reference no: EM131007353

You're the treasurer of Warm Wear Inc., which imports wool sweaters from around the world. Kreploc, a company in the country of Slobodia, has a product your marketing department would like to carry, and doesn't require payment until 90 days after delivery. Unfortunately the Slobodian blivit tends to vary in value by as much as 30% over periods as short as three months. This makes you reluctant to do business with Kreploc because of exchange rate risk. The marketing department can't understand why you have any concerns at all. Prepare a brief explanation, including an illustration, of why you're concerned.

Reference no: EM131007353

Questions Cloud

Announced that they were going to reduce the income tax : If the government announced that they were going to reduce the income tax next year, financed by finding a large and previously-unknown warehouse of real goods. What would happen to labor? To consumption? If the government announced they were going t..

How long will the company continue to manufacture the phone : The company is planning on withdrawing this model when annual sales reaches 60 000 cell phones. If current annual sales of these phones are 100 000. find S(t). How long will the company continue to manufacture this phone?

Determine the wire diameter theoretically required : A helical compression spring is to be designed for infinite life when subjected to a load that fluctuates between 55 and 110 lb. Steel spring wire having Su = 180 ksi, Sus = 144 ksi, Sy = 170 ksi, Ssy = 99 ksi, and a zero-to-maximum torsional en..

Unexpected exchange rate loss : "We'd never have another unexpected exchange rate loss again," says Harry. Prepare a polite response to Harry's idea. Explain why you do or don't like it, and suggest an alternative if you feel one is appropriate.

Determining the exchange rate risk : This makes you reluctant to do business with Kreploc because of exchange rate risk. The marketing department can't understand why you have any concerns at all. Prepare a brief explanation, including an illustration, of why you're concerned.

What is the earnings per share for abc : Which type of fund can sell at a discount or premium to the net asset value?

How can you reduce your impact on the environment : Read one of the articles you find and explain: The environmental impacts of that item or activity. How you as an individual can reduce your impact on the environment as it relates to this item or activity

List the common spring materials presented : The spring constant is to be 200 lb/in., and the stress at the design load is to be 80 ksi. The clash allowance is to be 0.10 in. The dimensions of related parts establishes that D should be 3 in. Determine N, d, and Lf . List the common spri..

Number of transactions for current fiscal year : Perez County entered into a number of transactions for the current fiscal year. Identify the fund or funds affected by each transaction and determine how each transaction will affect the accounting equation of the particular fund.

User Account

All Pages