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blsea [12.9K]
3 years ago
15

Diz Co. is a U.S.-based MNC with net cash inflows of euros and net cash inflows of Swiss francs. These two currencies are highly

correlated in their movements against the dollar. Yanta Co. is a U.S.-based MNC that has the same level of net cash flows in these currencies as Diz Co. except that its euros represent net cash outflows. Yanta Co has a higher exposure to exchange rate risk than Diz Co.
Required:
Which firm has a higher exposure to exchange rate risk? Why?
Business
1 answer:
VikaD [51]3 years ago
5 0

Answer:

Yanta Co. has a higher exposure to exchange rate risk than Diz Co.

The reason is that Yanta Co. does not have net inflows of euros.  Instead, its euro transactions yield net outflows.

It will always be in need of euros to settle its foreign debts or obligations, unlike Diz Co. with foreign assets.

Explanation:

a) Data and Analysis:

Diz Co. has net cash inflows of euros and net cash inflows of swiss francs

Yanta Co. has net cash outflows of euros and net cash inflows of swiss francs

b) Exposure to exchange rate risk or currency risk is the financial risk arising from fluctuations in the value of the US dollars against the Euro or Swiss Francs in which Diz Co. has some foreign assets while Yanta Co. has foreign obligations.

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kolbaska11 [484]

Answer:

no b

Explanation:

beacuse i did the test

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3 years ago
apple, which controls over 75 percent of digital music sales, was able to dictate song pricing for years, despite the tremendous
Maksim231197 [3]

If apple, which controls over 75 percent of digital music sales, was able to dictate song pricing for years, this implies that: Companies with strong network effects tend to enjoy substantial bargaining power over partners.

<h3>What is bargaining power?</h3>

Bargaining power can be defined as the way in which a company tend to have the ability to negotiate than another company in which the company with  the best negotiation power  tend to win the deal in which  both companies are negotiating on.

This scenario best illustrate bargaining power which is what makes it possible for apple to have control over seventy five percent of digital music sales.

Therefore we can conclude that apple have strong bargaining power over others companies.

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7 0
1 year ago
During the current year, the company had the following summarized activities: Purchased short-term investments for $10,000 cash.
aivan3 [116]

Answer:

short-term investment 10,000 debit

                     cash                10,000 credit

note receivables           5,000 debit

                cash                         5,000 credit

equipment                  18,000 debit

        cash                          5,000 credit

         note payable           13,000 credit

cash              11,000 debit

     common stock          1,000 credit

     additional CS          10,000 credit

cash               9,000 debit

    note payable             9,000 credit

Patents      3,000 credit

          cash                   3,000 debit

Building    24,000 debit

      cash               8,000 credit

     note payable 16,000 credit

cash         1,000 debit

  equipment          1,000 credit

Explanation:

To record the entries we need to alwasy make debit = credit

we must use account names to represent each concept which are quite easy you don't have to overthink ou write what it is telling you it happen

Whe nthe company use cash use cash account

when it purchase equipment use equiptment

7 0
3 years ago
Should the government forgive existing loans?
irinina [24]

Answer:

yes they should get smart dunmmy stop cheating

Explanation

8 0
3 years ago
sox corporation purchased a 35% interest in hack corporation for $1,750,000 on january 1, 2018. on november 1, 2018, hack declar
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Answer:

$1,050,000

Explanation:

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Sox corporation purchased a 35% interest in hack corporation for $1,750,000.

On November 1, 2018, hack declared and paid dividends = $2.0 million

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Carrying value:

= Purchased value - 35%(Dividend value)

= $1,750,000 - (0.35 × $2,000,000)

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Net loss of Sox = 35% of net loss during the year

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                         = $1,505,000

Since, the carrying value is less than the net loss of sox. Therefore, the net loss of $1,050,000 to be recognized by the sox corporation.

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3 years ago
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