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kupik [55]
3 years ago
14

A U.S. firm has sold an Italian firm €1,000,000 worth of product. In one year the U.S. firm gets paid. To hedge, the U.S. firm b

ought put options on the euro with a strike price of $1.65. They paid an option premium $0.01 per euro. If at maturity, the exchange rate is $1.60,
Business
2 answers:
Paraphin [41]3 years ago
7 0

Answer:

The firm will realize $1,640,000 on the sale net of the cost of hedging.

Explanation:

Nimfa-mama [501]3 years ago
5 0

Answer:

Since the US company paid $0.01 per euro for the put option, they will receive ($1.65 - $0.01) x 1,000,000 = $1,640,000 when they execute their option. That will result in a net gain of $1,640,000 - $1,600,000 (the current exchange rate) = $40,000. Since the exchange rate was lower than the put option rate, the company was able to make a gain.

Explanation:

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Direct Materials Purchases Budget
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Answer:

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Explanation:

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LO 7.1Which of the following is a finance budget?
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Answer:

cash budget                                  

Explanation:

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4 0
3 years ago
If ending accounts receivable exceeds the beginning accounts receivable Group of answer choices cash collections during the peri
sukhopar [10]

Answer:

no cash was collected during the period

or

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Explanation:

For example if we had Accounts receivable beginning balance $ 250,000 and Sales of $ 500,000 are made on accounts then the Total  Accounts receivable will be $ 750,000.

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3 years ago
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