True or false the risk premium is primarily concerned with business risk, financial risk, and inflation risk.

Your company expects to receive CAD 1,200,000 in 90 days. The 90 day forward rate for CAD is $0.80 and the current spot rate is

Masteriza [31]

Answer:

Cost of hedging = $24,000

Explanation:

cost of hedging = 1,200,000 * ($0.80 - $0.82) = 1,200,000 * $0.02 = -$24,000

Since the actual forward rate was higher than th eexpected forward rte, the coampny lost money by hedging the operation. The cost of hedging the operation was $24,000.

4 0

2 years ago

A compound document contains _______ from different applications.

kakasveta [241]

A compound document contains linked data from different applications.

4 0

3 years ago

Read 2 more answers

Indigo Company invests $11,700,000 in 4% fixed rate corporate bonds on January 1, 2020. All the bonds are classified as availabl

IceJOKER [234]

Answer:

a. Indigo do not elect fair value option

Journal entries

Date Description DR CR

2020

Jan 1 Bonds-available for sale asset $11,700,000

Cash book 11,700,000

Being the amount paid on acquisition

Dec 31

Interest receivable (4%*11,700,000) 468,000

Income statement 468,000

Being the interest due on the bond at the year end

b. Indigo elect the fair value option

Date Description DR CR

2020

Jan 1 Bond-available for sale asset 11,700,000

cash book 11,700,000

Being the amount paid on acquisition

Dec 31 Interest receivable 468,000

Income statement 468,000

Being the interest due on the bond at the year end

Dec 31 Bond 687,000

Revaluation surplus 687,000

Being the excess of fair value over the book value

Explanation:

3 0

3 years ago

A company borrows $10,000 and signs a 90-day nontrade note payable. In preparing a statement of cash flows (indirect method), th

frez [133]

Answer:

It will be regarded as inflow from financing activities

Explanation:

Since we are receiving money it is an inflow of cash. The bank can be regarded as a finance house. Since we are borrowing money and not buying assets this is regarded as a finance activity and this money will need to repaid in the future (finance from outside parties).

3 0

3 years ago

The receiving department of Owen has three activities: unloading, counting goods, and inspecting. Unloading requires a forklift

SpyIntel [72]

The cost of unloading is $52,000

Explanation:

Cost is the cash interest that a corporation has expended on sales and accounting to manufacture it. Within an organization, costs represent the amount of money spent on manufacturing or developing a good or service. Price requires no benefit premium.

Resource Unloading Equipment $15,000

Fuel $2,000

Operating Labour = (25% × [4 $35,000] = $35,000)

= $35,000

Total = $35,000+$15,000 +$2,000

= $52,000

5 0

3 years ago