Excess cash in argentina at an annual interest

Assignment Help Finance Basics
Reference no: EM132202890

A U.S. company is considering investing $5 million in excess cash in Argentina at an annual interest rate of 65 percent. The U.S. interest rate is 7 percent. (1) By how much would the Argentine peso have to depreciate to cause such a strategy to backfire? (2) What other factors should the U.S. company consider before making such an investment?

Reference no: EM132202890

Questions Cloud

Compare risk among different investment alternatives : What volatility measure can we use to evaluate and compare risk among different investment alternatives?
Calculate condor weighted average cost of capital : Condor's tax rate is 21 percent. Calculate Condor's weighted average cost of capital??
How many canadian dollars are needed to raise : The current exchange rate of the Canadian dollar is $.77. (1) How many Canadian dollars are needed to raise the 5 million U.S. dollars?
Calculate the expected cost : The Russian interest rate is 15%. Calculate the expected cost (as a percentage) of financing a 1-year loan in rubles.
Excess cash in argentina at an annual interest : A U.S. company is considering investing $5 million in excess cash in Argentina at an annual interest rate of 65 percent
What is the effective yield of investing in rand : At the time the investment is made, the spot rate of the rand is $.065. If the spot rate of the rand at maturity of the investment is $.062
Total assets turnover ratio : Help me understand what is the total assets turnover ratio and why is it important for a business?
Why is it important for a business : Help me understand what is the return on assets ratio and why is it important for a business?
Formula for the capital market line : Using the formula for the capital market line (Formula 17-5), if the risk-free rate (RF) is 5%, the market rate of return (KM) is 11

Reviews

Write a Review

Finance Basics Questions & Answers

  Lower the coupon rate of a bond

"If the spot rate curve is increasing, the lower the coupon rate of a bond, the higher is its yield to maturity for a given time to maturity." Is this statement true?

  Computing present value

Suppose that you would like to purchase one hundred shares of preferred stock that pays an annual dividend of $6 per share. You have limited resources now, so you cannot afford buying price.

  What is the equivalent annual annuity

(Calculation equivalent annual annuity) Industrial Zone Group, which operates in building industry in South Caucasus, is considering making investments.

  What is meant by the expression time value of money

What is meant by the expression, time value of money? How do managers go about making segment product line elimination decisions?

  Should the company make the investment

Your company is looking at a new project in Mexico. The project will cost 5,345,000 pesos. The cash flows are expected to be 2,442,000 pesos per year.

  Whitts bbq would like to issue some semiannual coupon bonds

whitts bbq would like to issue some semiannual coupon bonds at par. comparable bonds have a current yield of 9.16

  What will be the new pe ratio of xyz

What will be the new P/E ratio of XYZ, Inc. if it adopts this new debt-enhanced strategy? For this question, assume taxes are zero.

  What is the expected capital gains yield

The next dividend payment by Blue Cheese, Inc., will be $1.89 per share. The dividends are anticipated to maintain a growth rate of 5 percent forever. The stock currently sells for $38 per share. 1. What is the dividend yield? 2. what is the expec..

  Relationship between inventory turnover and purchasing needs

Discuss and explain to me the relationship between inventory turnover and purchasing needs and determine the advantage and disadvantage of level production schedules in firms with cyclical sales?

  Discuss monthly bank statement which damon company receives

Damon Company receives its monthly bank statement, which reports a balance of $1,750. After comparing this to the company's cash records.

  At what price would you expect given bond

If interest rates remain unchanged, at what price would you expect this bond to be selling eight years from now? Ten years from now?

  Would required return by investors who invest in stocks

Assume that the anticipated inflation rate has just been revised upward by the market. Would the required return by investors who invest in the stocks be affect

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