# Question

Atreides International has operations in Arrakis. The balance sheet for this division in Arrakeen solaris shows assets of 27,000 solaris, debt in the amount of 11,000 solaris, and equity of 16,000 solaris.

a. If the current exchange ratio is 1.50 solaris per dollar, what does the balance sheet look like in dollars?

b. Assume that one year from now the balance sheet in solaris is exactly the same as at the beginning of the year. If the exchange rate is 1.60 solaris per dollar, what does the balance sheet look like in dollars now?

c. Rework part (b) assuming the exchange rate is 1.41 solaris per dollar.

a. If the current exchange ratio is 1.50 solaris per dollar, what does the balance sheet look like in dollars?

b. Assume that one year from now the balance sheet in solaris is exactly the same as at the beginning of the year. If the exchange rate is 1.60 solaris per dollar, what does the balance sheet look like in dollars now?

c. Rework part (b) assuming the exchange rate is 1.41 solaris per dollar.

## Answer to relevant Questions

In the previous problem, assume the equity increases by 1,250 solaris due to retained earnings. If the exchange rate at the end of the year is 1.54 solaris per dollar, what does the balance sheet look like?An investment project has annual cash inflows of $3,200, $4,100, $5,300, and $4,500, and a discount rate of 14 percent. What is the discounted payback period for these cash flows if the initial cost is $5,900? What if the ...Consider the following two mutually exclusive projects:Sketch the NPV profiles for X and Y over a range of discount rates from zero to 25 percent. What is the crossover rate for these twoprojects?A project has the following cash flows: Year Cash Flow0 $42,0001 21,0002 32,000What is the IRR for this project? If the required return is 12 percent, should the firm accept the project? What is the NPV of this project? ...Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.7 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after ...Post your question

0