Reference no: EM132527527
-Boeing just signed a contract to sell a Boeing 787 aircraft to Air France. Air France will be billed €20 million which is payable in one year. The likely spot exchange rate is then expected to be $1.05/€ and the one-year forward rate is $1.10/€. Boeing is concerned with the volatile exchange rate between the dollar and the euro and would like to hedge exchange exposure. What is the expected gain/loss from the forward hedging?
-Walt Disney expects to receive a Mex$16 million theatrical fee from Mexico in 90 days. The current spot rate is $0.1321/Mex$ and the 90-day forward rate is $0.1242/Mex$.If the spot rate expected in 90 days is $0.1305, what is the expected U.S. dollar value of the fee?
What is the hedged dollar value of the fee?
-An importer has a payment of £8 million due in 90 days.If the 90-day pound forward rate is $1.4201, what is the hedged cost of making that payment?
If the spot rate expected in 90 days is $1.4050, what is the expected cost of payment?
-Airbus sold an aircraft, A350-900, to Delta Airlines, a U.S. company, and billed $30 million payable in six months. Airbus is concerned with the euro proceeds from international sales and would like to control exchange risk. The current spot exchange rate is $1.05/€ and six- month forward exchange rate is $1.10/€ at the moment. Airbus can buy a six-month put option on U.S. dollars with a strike price of €0.95/$ for a premium of €0.02 per U.S. dollar.Compute the guaranteed euro proceeds from the American sale if Airbus decides to hedge using a forward contract.
If Airbus decides to hedge using put options on U.S. dollars, what would be the 'expected' euro proceeds from the American sale?
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Repeat the journal entry for the December transaction
: Repeat the journal entry for the 18 December 2016 transaction, assuming that Watts Ltd uses the direct write-off method of accounting for bad debts
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Find the budgeted amounts of fixed and variable costs
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What is the discounted payback period
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What would be the financial advantage of buying arburetors
: Given this new assumption, what would be the financial advantage (disadvantage) of buying 20,000 carburetors from the outside supplier?
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What is the expected cost of payment
: Boeing just signed a contract to sell a Boeing 787 aircraft to Air France. Air France will be billed €20 million which is payable in one year
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How much would sales have to increase for the company
: If Den's advertising costs increased by $6,000, by how much would sales have to increase for the company to achieve an operating profit of $4,000?
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Calculate the economic value added assuming its cost
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Find the direct labor rate variance if the company produced
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Simplified financial statements for phone corporation
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