Answer:
a-The net present value in dollars is 494939.0687.
b-1-The required return on franc flows is 11.72%.
b-2-The net present value in Francs is 519686.02.
b-3-The NPV in dollars as calculated from NPV in Francs is $494939.07
Explanation:
a
In order to find the solution, firstly the exchange rate for the 5 years is calculated. It is calculated using the formula:
![EER=CER*(1-GRD+GRF)^t](https://tex.z-dn.net/?f=EER%3DCER%2A%281-GRD%2BGRF%29%5Et)
Here
- EER is the expected exchange rate which is to be calculated
- CER is the current exchange rate which is 1.05
- GRD is the going rate of dollars which is 6% or 0.06
- GRF is the going rate of Francs which is 4% or 0.04
- t is the time in years.
From this exchange rate, the PV factor is calculated which is than used to find the present value and similarly net present value in total. The solution is provided in the attached Excel Sheet.
The net present value in dollars is 494939.07
b-1
The required rate on the Franc return is given as:
![FRR=(1+DR)(1-GRD+GRF)-1](https://tex.z-dn.net/?f=FRR%3D%281%2BDR%29%281-GRD%2BGRF%29-1)
Here
- FRR is the franc return rate which is to be calculated
- DR is the dollar rate which is 14% or 0.14
- GRD is the going rate of dollar which is 6% or 0.06
- GRF is the going rate of Franc which is 4% or 0.04
So the value becomes:
![FRR=(1+DR)(1-GRD+GRF)-1\\FRR=(1+0.14)(1-0.06+0.04)-1\\FRR=0.1172\text{ or }11.72\%](https://tex.z-dn.net/?f=FRR%3D%281%2BDR%29%281-GRD%2BGRF%29-1%5C%5CFRR%3D%281%2B0.14%29%281-0.06%2B0.04%29-1%5C%5CFRR%3D0.1172%5Ctext%7B%20or%20%7D11.72%5C%25)
The required return on franc flows is 11.72%.
b-2
Similar to part a, the solution is found for the return rate of 11.72 and the exchange rate is not required. The values are as indicated in the excel sheet attached.
The net present value in Francs is 519686.02.
b-3
In order to convert the Franc NPV to dollars, the exchange rate of 1.05SF is used which gives
![NPV_{dollars}=\dfrac{NPV_{Francs}}{ER}](https://tex.z-dn.net/?f=NPV_%7Bdollars%7D%3D%5Cdfrac%7BNPV_%7BFrancs%7D%7D%7BER%7D)
Here
- NPV_dollars is the value of NPV which is to be calculated.
- NPV_francs is the value of NPV calculated in previous step which is 510686.02.
- ER is the exchange rate whose value is 1.05
So the equation becomes:
![NPV_{dollars}=\dfrac{NPV_{Francs}}{ER}\\NPV_{dollars}=\dfrac{519686.02}{1.05}\\NPV_{dollars}=494939.0666=\$494939.07](https://tex.z-dn.net/?f=NPV_%7Bdollars%7D%3D%5Cdfrac%7BNPV_%7BFrancs%7D%7D%7BER%7D%5C%5CNPV_%7Bdollars%7D%3D%5Cdfrac%7B519686.02%7D%7B1.05%7D%5C%5CNPV_%7Bdollars%7D%3D494939.0666%3D%5C%24494939.07)
The NPV in dollars as calculated from NPV in Francs is $494939.07
Answer:
The correct answer is False.
Explanation:
Taking into account the nature of the marketing intermediary, Jessica Talmadge can be said to act as such, since the agent simply acts as an intermediary for the operation and is not obliged to relate directly to it. The agent is in charge of putting all her knowledge so that the process is carried out in an easier and cleaner way.
Answer:
it is output because its aoutput
Explanation:
Answer:
Outputs of operations management processes are always tangible goods.
Explanation:
Operations management focuses on the production and distribution processes of both goods and services. Its main goal is to improve the efficiency and effectiveness of the processes involved.
When applying operations management o service processes, you must pay attention to how the service is delivered to customers, e.g. procedures, schedules, activities, etc.