1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
My name is Ann [436]
3 years ago
14

A U.S.-based importer, Zarb Inc., makes a purchase of crystal glassware from a firm in Switzerland for 39,960 Swiss francs, or $

24,000, at the spot rate of 1.665 francs per dollar. The terms of the purchase are net 90 days, and the U.S. firm wants to cover this trade payable with a forward market hedge to eliminate its exchange rate risk. Suppose the firm completes a forward hedge at the 90-day forward rate of 1.682 francs. If the spot rate in 90 days is actually 1.638 francs, how much will the U.S. firm have saved or lost in U.S. dollars by hedging its exchange rate exposure? Select one: a. -$396 b. -$243 c. $0 d. $243 e. $638
Business
1 answer:
IRINA_888 [86]3 years ago
4 0

Answer:

e. $638

Explanation:

payment to be made as per forward contract (IN $)

= 39960/ 1.682  

= $23757.43  

now the actual rate after 90 days is 1.638

payment at 1.638 rate = 39960/ 1.638

                                    = $24395.6  

loss by hedging = $24395.6 - $23757.43  

                           = $638.17

Therefore, The U.S. firm have saved or lost $638 in U.S. dollars by hedging its exchange rate exposure.

You might be interested in
Exercise 13-17 Swifty Company has been operating for several years, and on December 31, 2017, presented the following balance sh
mixer [17]

Answer:

(a) Current ratio = 2.746

(b) Acid-test ratio = 1.423

(c) Debt to assets ratio = 47.48%  

(d) Return on assets = 6.15%

Explanation:

For Balance Sheet, pleased see attached file.

Current Ratio = Current Asset / Current Liabilities

Current Ratio = 212,800 / 77,500

Current Ratio = 2.746

Acid-Test Ratio = (Current Assets – Inventories) / Current Liabilities

Acid-Test Ratio = (212,800 – 102,500) / 77,500

Acid-Test Ratio = 1.423

Debt to Asset ratio = (Total Liabilities / Total Assets)*100

Debt to Asset ratio = (205,500 / 432,800)*100

Debt to Asset ratio = 47.48%

ROA = (Net Income / Total Assets)*100

ROA = (26,600 / 432,800)*100

ROA = 6.15%

The Current Ratio is a liquidity measure that shows the ratio between current asset and current liabilities. It tells how many dollars of the current asset are per dollar of current debts, that gives an idea of the company`s ability to perform its debts.    

The Quick Ratio is also a liquidity indicator, but using its most liquid assets, to pay its current liabilities at maturity. The inventory, although it is a current asset, is not considered, since it cannot be converted into cash in a very short term.

The difference between the Quick Ratio and the Current Ratio, implies that while both are measures of the company's ability to pay its debts, the quick ratio also tells how much the company depends on its inventory to get that objective.

The Debt to Assets ratio is a financial ratio that shows how much of a company assets is owed to its creditors.  

ROA is a financial indicator that gives an idea as to how efficient a company's management is at using its assets to generate earnings, by determining how profitable a company is relative to its total assets.

6 0
3 years ago
The price of crude oil increases 50%. This will cause a change in ( supply/ quality supplied )
Paladinen [302]

Answer:

See below

Explanation:

A price increase motivates suppliers to avail more products for sale in the markets. High prices tend to have a high margin hence more profits. Like other businesses, oil producers are profit-motivated; they will supply more quantities if there is a high probability of making more profits.

The law of supply explains the correlation between supply and price. As prices increase, supply also tends to increase.

5 0
3 years ago
The __________ Rate is the interest rate the Fed charges banks and thrifts to borrow to meet the reserve requirement.
adoni [48]

Answer:

Federal funds rate

Explanation:

The federal funds rate is the interest rate at which depository institutions (banks and thrifts) lend reserve balances to each other to meet reserve requirements.

Reserve requirements are the amount of funds required by the central bank  that banks should keep as reserves to meet liabilities

the Federal funds rate is currently  maintained at a range of 0% to 0.25%

5 0
3 years ago
There can be many departments or just a few when _____ a business.
Cerrena [4.2K]

Answer:

it depends on the business

Explanation:

when the business is small there will be less department but if the business is big then there will be more department

4 0
2 years ago
Read 2 more answers
Macee Department Store has three departments, and it conducts advertising campaigns that benefit all departments. Advertising co
Deffense [45]

Answer:

(i) $34,200

(ii) $55,860

(iii) $23,960

Explanation:

Total sales = $ 240,000 + $392,000 + $168,000

                  = $800,000

Department 1:

sales = $240,000

Percent of total = sales ÷ Total sales

                          = $240,000 ÷ $800,000

                          = 0.3

Allocated amount = % of total × advertising to allocate

                              = 0.3 × $114,000

                              = $34,200

Department 2:

sales = $392,000

Percent of total = sales ÷ Total sales

                          = $392,000 ÷ $800,000

                          = 0.49

Allocated amount = % of total × advertising to allocate

                              = 0.49 × $114,000

                              = $55,860

Department 3:

sales = $168,000

Percent of total = sales ÷ Total sales

                          = $168,000 ÷ $800,000

                          = 0.21

Allocated amount = % of total × advertising to allocate

                              = 0.21 × $114,000

                              = $23,940

3 0
3 years ago
Other questions:
  • All About Animals has two product​ lines: Cat food and Dog food. Contribution margin income statement data for the most recent y
    13·1 answer
  • Devin had worked for his company for several years and was considered to be a politically savvy employee. After earning several
    14·1 answer
  • Suppose that Verizon Wireless has hired you as a consultant to determine what price it should set for calling services. Suppose
    12·1 answer
  • Suppose there are only two types of goods
    15·1 answer
  • Oahu Industries' average total assets for the year are $4,000,000, its average total stockholders' equity for the year are $3,00
    11·1 answer
  • The president wishes to increase spending for education by $4 billion but also maintain a balanced budget. Therefore, taxes will
    9·1 answer
  • Compute the payback period for each of these two separate investments: A new operating system for an existing machine is expecte
    5·1 answer
  • Eleanor is a divorce attorney who practices law in Dallas. She wants to join the American Divorce Lawyers Association (ADLA), a
    7·1 answer
  • When analyzing a price-earnings ratio:_________.
    6·1 answer
  • Roger is almost done with his feasibility study and is concerned about the financing. Up until this point, he has been operating
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!