Assuming fab wishes to minimize cost

Assignment Help Accounting Basics
Reference no: EM13133817

FAB Corporation will need 200,000 Canadian dollars (C$) in 90 days to cover a payable position. Currently, a 90-day call option with an exercise price of $.75 and a premium of $.01 is available. Also, a 90-day put option with an exercise price of $.73 and a premium of $.01 is available. FAB plans to purchase options to hedge its payable position. Assuming that the spot rate in 90 days is $.71, what is the net amount paid, assuming FAB wishes to minimize its cost?

a. $144,000.

b. $148,000.

c. $152,000.

d. $150,000.

Reference no: EM13133817

Questions Cloud

Word problem involving tangent function : A patient is being treated with laser therapy to remove a tumour that is located behind a vital organ. The tumor is 5.7 cm below the skin. To avoid the organ, the entry point of the laser must be 12.4 cm above the tumour along the skin.
What was the company turnover rounded to the nearest tenth : Last year the House of Orange had sales of $826,650, net operating income of $81,000, and operating assets of $84,000 at the beginning of the year and $90,000 at the end of the year. What was the company's turnover rounded to the nearest tenth?
Creditors petition the court to order the company sold : When the company has filed under chapter 11, can the creditors petition the court to order the company sold pursuant to a offer? What elements should the court take into consideration?
Define mechanism for propene treated with hocl : When propene is treated with hypochlorous acid (HOCl), the product isolated is 1-chloro-2-propanol.
Assuming fab wishes to minimize cost : Assuming that the spot rate in 90 days is $.71, what is the net amount paid, assuming FAB wishes to minimize its cost?
Five specific problem-solving strategies : Describe at least five specific problem-solving strategies that these students can use to solve mathematics problems. For each strategy, give an example.
Parties in a criminal case : The Parties in a criminal case and a civil case.The burden of proof in both criminal and civil cases.
What is the specific heat capacity of the alloy : A 30.5-g sample of an alloy at 93.0°C is placed into 50.0 g of water at 22.0°C in an insulated coffee cup with a heat capacity of 9.2 J/K.
Sketch two specified normal curves on same set of axes : Suppose that the probability distribution of a random variable x can be described by the formula. Calculate the variance and standard deviation.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Cost of goods in process-finish goods inventory

How do you compute total cost of goods in process/finish goods inventory?

  Record the bond pruchase on august 1, 2010

On August 1, 2010, Dambro Co acquired 200, $1,000, 9% bonds at 97 plus accrued interest. The bonds will be added to Dambro's available for sale portfolio. The bonds were dated May 1, 2010, and mature on April 30, 2016, with interest paid each October..

  Investments-stocks-shares and dividends

Big Brother Holdings, Inc. had the following available-for-sale investment portfolio at January 1, 2002. Prepare journal entries for each of the above transactions.

  Accounting for income taxes

In AT&Ts 2000 annual report, the company reported long-term deferred tax assets of $4,523,000,000 and current deferred tax assets of $1,791,000,000. What might contribute to AT&Ts need to record a valuation allowance?

  Qualitative-quantitative limitations of financial statements

Illustrate out the qualitative and quantitative limitations of financial statements? What is the FASB and what role does that entity play? Have you heard of and do you know the meaning of IFAS and GAAP?

  Problem related to depreciation deduction

State law requires the depreciation be charged to principal. What part of the depreciation deduction will be allocated to Mark?

  What is the company breakeven point in unit sales

Travelers Aids most recent income statement follows Total Per Unit Sales (3,000 units) $90,000 $30.00 Variable expenses $54,000 $18.00 Contribution margin $36,000 $12.00 Fixed Expenses $22,000 Net operating income $14,000.

  Prepare the sales revenues section of the income

Milton Company provides this information for the month of November, 2007: sales on credit $150,000; cash sales $50,000; sales discount $2,000; and sales returns and allowances $8,000. Prepare the sales revenues section of the income statement base..

  What information is included in the governmental activites

Concerning the government-wide statement of net assets, describe what information is included in the governmental activites column, the business type activities column, and the column for the total primary government.

  Problem related to auditors examination

How is an auditors examination affected when a client has engaged in significant related party transactions? What measures should an auditor take to determine that such transactions have been properly recorded by the client?

  Journal entry for depreciation-presentation

At the end of its first year, the trial balance of Eaton Company shows Equipment $30,000 and zero balances in Accumulated Depreciation?Equipment and in Depreciation Expense ?Equipment. Depreciation for the year is estimated to be $6,000.

  Compute the gross-margin percentage for each product

the solution of this exercise 16-27 Alternative methods of joint-cost allocation, product-mix decisions. The Southern Oil Company buys crude vegetable oil.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd