Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
A small Canadian company has contracted to purchase 100,000 toys for £ 3.50 each from a British toy manufacturer. The Canadians have agreed to pay in pounds sterling. The Canadians have also agreed to sell the toys to a US company for $5.50 US per toy. The Canadian company has agreed to accept US dollars but plans to convert these revenues to Canadian dollars. The Canadian company estimates its marginal costs for warehousing, distribution, etc. is C$.75 per toy.
Exchange rates at the time of signing the agreements are as follows:
Canadian $1= US $0.80
Canadian $1= British pound .66
a) Is this a good deal for the Canadian company? Why or why not?
b) What impact would a devaluation of the US dollar relative to the Canadian dollar have on the Canadian company's profits? What impact would a revaluation upward have? use specific examples to illustrate your answer.
c) What impact would a devaluation of the British pound relative to the US dollar have on the Canadian company's profits? Use specific examples to illustrate your answer.
d) What could the Canadian company do to minimize its exchange rates?
A life insurance company purchases 1 billion of corporate bonds from premiums collected on its life insurance policies. therefore
Genetic Insights Co. purchases an asset for $10,830. This asset qualifies as a seven-year recovery asset under MACRS. The seven-year fixed depreciation percentages for years 1, 2, 3, 4, 5, and 6 are 14.29%, 24.49%, 17.49%, 12.49%, 8.93%, and 8.93%, r..
Jiminy’s Cricket Farm issued a bond with 25 years to maturity and a semiannual coupon rate of 12 percent 3 years ago. The bond currently sells for 94 percent of its face value. The company’s tax rate is 35 percent. What is the pretax cost of debt? Wh..
Sixx AM Manufacturing has a target debt-equity ratio of 0.46. Its cost of equity is 14 percent, and its cost of debt is 7 percent. If the tax rate is 36 percent, what is the company's WACC?
A 5.5 percent $1,000 bond matures in 7 years, pays interest semi-annually, and has a yield to maturity of 6.23 percent. What is the current market price of the bond?
A firm is evaluating a project which will cost $7,586 today and provide additional cash flows in years 1, 2, 3 and 4 of $5,568, $2,586, $2,586, and $7,560, respectively. The project will also employ $5,000 in working capital during the life of the pr..
________ is at the heart of corporate finance, because it is concerned with making the best choices about project selection.
Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $160. The materials cost for a standard diamond is $60. The fixed costs incurred each year for factory upkeep and administrative expenses are $218,000. Wh..
Other things being equal, would a firm prefer a longer or shorter Cash Conversion Cycle? What are some examples of ways a firm could attain this
Avery owns a mutual fund with a NAV of $38.00 per share and expenses of $1.50 per share. What is the expense ratio for Avery's mutual fund? Jo purchased 375 shares of a no-load stock mutual fund. During the year she received $3 per share in dividend ..
Consider a 15-year, $150,000 mortgage with a rate of .0590 percent. Nine years into the mortgage, rates have fallen to 5 percent. What would be the monthly saving to a homeowner from refinancing the outstanding mortgage balance at the lower rate for ..
Firms HL and LL are identical except for their leverage ratios and the interest rates they pay on debt. Each has $16 million in invested capital, has $2.4 million of EBIT, and is in the 40% federal-plus-state tax bracket. Calculate the return on inve..
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd