Thirdly, storage of services is not possible, as services are consumed when offered to a customer.
Answer: Option 3.
<u>Explanation:</u>
Perishable is a feature where a good or service can not be stored for long. They might get hampered and do not remain like their original self if they are stored.
Services have a perishable nature in the sense that they can not be stored like some of the goods which can be stored. The services are to be consumed then and there at the moment when they are offered to the customers. They can not be kept reserved.
Answer:
alitalia should do the forward hedge to hedge its transaction exposure
Explanation:
Alitalia can construct the money market hedge as follows
1. borrow Euro whose present value is equal to the amount to be paid.
2. convert it to foreign currency at the current spot rate.
3. place it in a deposit
4. make the payment when the deposit reaches maturity
PV of payment = 10000000/1.05
= 9523809.525
converting in to Euro at the spot rate we get 6802721.09 Euros
so Alitalia has to borrow the above amount and convert it and invest it at 5%.
now the payable amount from the loan is 6802721.09(1+0.03) = 7006802.72 Euros
Hence Alitalia has effective managed to locl in a forward rate of 1.427$/euros (10000000/7006802.72)$/euros
Therefore, alitalia should do the forward hedge to hedge its transaction exposure
First, the quotation for each car model has to be obtained. The quotation must include the taxes including insurance.Then, a comparison is done taking into account the mileage and the maximum allotted budget for the other expenses which is $800.
