What is the amount of operating cash flow

Assignment Help Financial Management

Reference no: EM132006300

1. The current spot exchange rate is $1.55/€ and the three-month forward rate is $1.60/€. Based upon your economic forecast, you are pretty confident that the spot exchange rate will be $1.57/€ in three months. Assume that you would like to buy or sell €100,000. What actions would you take to speculate in the forward market? How much will you make if your prediction is correct? (Points : 3.5)

a. Take a short position in a forward. If you're right you will make $3,000.

b. Take a long position in a forward contract on euro. If you're right you will make $3,000.

c. Take a short position in a forward contract on euro. If you're right you will make $2,000.

d. Take a long position in a forward contract on euro. If you're right you will make $2,000.

2. The By-Way has sales of $435,000, costs of $254,000, depreciation of $35,000, interest expense of $22,000, and taxes of $43,400. What is the amount of the operating cash flow?

$115,600

$157,900

$137,600

$322,100

$114,340

Reference no: EM132006300

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