A total-cost curve shows the relationship between the

5. Princess Cruise Company (PCC) purchased a ship from Mitsubishi Heavy Industry. PCC owes Mitsubishi Heavy Industry 500 million

ollegr [7]

Answer:

a.) $4,147,465

b.)The total expected cost will thus be $4,125,600, which is the sum of $75,600 and $4,050,000.

Explanation:

(a) In the case of forward hedge, the dollar cost will be 500,000,000/110 = $4,545,455. In the case of money market hedge, the future dollar cost will be: 500,000,000(1.08)/(1.05)(124)

= $4,147,465.

(b) The option premium is: (.014/100)(500,000,000) = $70,000. Its future value will be $70,000(1.08) = $75,600.

At the expected future spot rate of $.0091(=1/110), which is higher than the exercise of $.0081, PCC will exercise its call option and buy ¥500,000,000 for $4,050,000 (=500,000,000x.0081).

The total expected cost will thus be $4,125,600, which is the sum of $75,600 and $4,050,000.

(c) When the option hedge is used, PCC will spend “at most” $4,125,000. On the other hand, when the forward hedging is used, PCC will have to spend $4,545,455 regardless of the future spot rate. This means that the options hedge dominates the forward hedge. At no future spot rate, PCC will be indifferent between forward and options hedges.

6 0

4 years ago

John wishes to pay off his car loan of $4,626 in 18 months. How much will his monthly payment be assuming he pays the same amoun

yulyashka [42]

Answer:

$257 a month

Explanation:

8 0

4 years ago

PLEASE HELP!! i’ll give brainliest

Yuliya22 [10]

Answer:

Share your vision with them. Let employees know our plans for your company and your products and services. ...

Keep them in the loop. ...

Involve them in the launch of new products. ...

Reward them for building relationships with customers.

Explanation:

7 0

3 years ago

Read 2 more answers

The following two errors were made in the physical inventory counts: 1. 2012 ending inventory was overstated by $33,000. 2. 2013

timofeeve [1]

Answer:

2013: $490,000 2012: $561,000

Question:

Errors in inventory count the following information was taken from the record of Spencer Enterprises

2013 2012

Beginning Inventory $63,000 $83,000

Cost of goods purchased $548,000 $508,000

Cost of goods available for sale $611,000 $591,000

Ending inventory $93,000 $63,000

Cost of goods sold $518,000 $528,000

The following two errors were made in the physical inventory counts:

1. 2012 ending inventory was overstated by $33,000

2. 2013 ending inventory was understated by $28,000.

Compute the correct cost of goods sold for both 2012 and 2013.

Explanation:

Computation of cost of goods sold for the year 2016 and 2015

Particulars 2013 2012

Beginning inventory $63,000 $83,000

Cost of goods purchased $548,000 $508,000

Cost of goods available for sale $611,000 $591,000

Ending inventory (corrected) $121,000 $30,000

Cost of goods sold (corrected) $490,000 $561,000.

note:

In 2013 new ending inventory = $93,000 + $28,000 = $121,000

In 2012 new ending inventory = $63,000 - $33,000 = $30,000

Beginning inventory + Cost of goods purchased = Cost of goods available for sale

Cost of goods available for sale - Ending inventory = Cost of goods sold

3 0

3 years ago

Do you think that legacy stores such as Macy’s and even WalMart will be able to compete with online stores in the future? How wo

mylen [45]

Answer:

of course they will

Explanation:

toys r us is a great example of not adapting macys and walmart and other similar stores are smart enough to adapt thats why things like online shopping curbside delivary and pickup have gone in to effect

8 0

3 years ago