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alina1380 [7]
2 years ago
7

You plan to visit Geneva, Switzerland in three months to attend an international business conference. You expect to incur the to

tal cost of SF 10,000 for lodging, meals and transportation during your stay. As of today, the spot exchange rate is $0.60/SF and the three-month forward rate is $0.63/SF. You can buy the three-month call option on SF with the exercise rate of $0.64/SF for the premium of $0.05 per SF. Assume that your expected future spot exchange rate is the same as the forward rate. The three-month interest rate is 6 percent per annum in the United States and 4 percent per annum in Switzerland. (a) Calculate your expected dollar cost of buying SF10,000 (after including option premium) if you choose to hedge via call option on SF
Business
1 answer:
aliina [53]2 years ago
5 0

Answer:

Therefore , the total future costs of buying sf 10000  = $6807.5

Explanation:

Premium = 0.05 (10000) = $500

Finding the value of $500 in 3 months = 500(1.015)= 507.5

The future expected spot rate is $0.63/sf, because this is less than exercise price, I will not exercise options. Instead I will expect to buy swiss franc at $0.63/sf. Since I will purchase sf 10000.

I will spend (0.63* 10000) = $6300.

Therefore , the total future costs of buying sf 10000 ,

$6300+$507.5 = 6807.5

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Suppose that the weekly price of milk is $3.40 per gallon and MPEP decides to ramp up weekly advertising by 35 percent to $150 (
nadezda [96]

Answer:

Total Cost increase  5,253.4 unit

Explanation:

given data

weekly price a = $3.40 per gallon

ramp up weekly b = 35%

ramp up weekly  upto x = $150( in hundred)

solution

we will use here the regression equation that is

Y = a + b x    ...........................1

here Y is Total Cost and a is fixed cost and  

b is rate of variability and x is level of activity

so here put value in equation 1 we get

Total Cost Y = 3.40 + 0.35 × ( 15,000)

Total Cost  Y = 3.40 + 5,250

Total Cost increase  5,253.4 unit

7 0
1 year ago
. Which statement in the given text points to George being an ethical leader? George had been working as a manager in a company
SIZIF [17.4K]

Answer:

His company had been going through a lot of transition in the past year because they wanted to improve their public image.

George made sure that the restaurant served all the dishes that were popular in the locality.

Explanation:

An "ethical leader" is concerned about the beliefs and values of people in the society. In order to adapt to locality, George has to consider the company's virtues by improving their public image. This will make their restaurants desirable. This can also be done if the restaurants will make sure <u>to know what the popular dishes are in the local area.</u> For example, if the people prefer "halal" food, then they'll be preparing halal foods as well. This is an ethical way of respecting the people's preference in the area.

So, this explains the answers.

6 0
1 year ago
For 2019, Bargain Basement Stores reported $11,500 of sales and $5,000 of operating costs (including depreciation). The company
Kamila [148]

Answer:

Economic Value Added (EVA) = $2,620

Explanation:

WACC = 11%

Capital = $20,500

Sales = $11,500

Operating cost = $5,000

Tax rate = 25%

EBIT = Sales - Operating cost

EBIT = $11,500 - $5,000

EBIT = $6,500

Economic Value Added (EVA) = EBIT (1 - T) - (WACC * Capital)

Economic Value Added (EVA) = 6,500*( 1 - 0.25) - (0.11 * $20,500)

Economic Value Added (EVA) = $4,875 - $2,255

Economic Value Added (EVA) = $2,620

5 0
1 year ago
Assume a company's Income Statement for Year 12 is as follows Year 12 in 000s Income Statement Data Net Revenues from Footwear S
eimsori [14]

Answer:

C. 4.00

Explanation:

The interest coverage ratio is the same as times interest earned.

It is a the financial ratio that shows how many times over the income or earnings before interest and tax can be used to pay the interest payable in the same period.

Hence, Interest coverage

= Earnings before interest and taxes (EBIT) / Interest expense

EBIT = $580,000 - $350,000 - $45,000 - $90,000 -$15,000

= $80,000

The company's interest coverage ratio is

= $80,000/$20,000

= 4.00

6 0
1 year ago
Laurasia has identified the following goods as its market basket. Here are the prices of those goods over three years.
Zielflug [23.3K]

Answer:

  • 2015 = $94
  • 2016 = $128.50
  • 2017 = $115

Explanation:

A Market Basket is used to calculate inflation overtime by tracking the change in prices of a specific and permanent number of goods and services.

The formula for calculating the market basket is;

Cost of Market Basket_{year} = ∑(Price of good * Basket Quantity of good)

2015

Cost of Market Basket = (25 * 0.4) + (2 * 18) + ( 4 * 12)

Cost of Market Basket = 10 + 36 + 48

Cost of Market Basket = $94

2016

Cost of Market Basket = (25 * 0.5) + (2 * 22) + ( 4 * 18)

Cost of Market Basket = 12.5 + 44 + 72

Cost of Market Basket = $128.50

2017

Cost of Market Basket = (25 * 0.6) + (2 * 20) + ( 4 * 15)

Cost of Market Basket = 15 + 40 + 60

Cost of Market Basket = $115

6 0
1 year ago
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