A U.S. company that imports laptop computers from Japan knows that in 30 days it must...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A U.S. company that imports laptop computers from Japan knows that in 30 days it must pay in yen to a Japanese supplier when a shipment arrives. The company will pay the Japanese supplier x150,000 for each computer, and the current dollar/yen spot exchange rate is $1 = x110. The importer can sell the computers the day they arrive for $1,600 each. However, the importer will not have the funds to pay the Japanese supplier until the computers have been sold. The importer enters into a 30-day forward exchange transaction with a foreign exchange dealer at $1 = x105. What is the profit or loss per computer if the exchange rate after 30 days is $1 = x90? Show your work. A U.S. company that imports laptop computers from Japan knows that in 30 days it must pay in yen to a Japanese supplier when a shipment arrives. The company will pay the Japanese supplier x150,000 for each computer, and the current dollar/yen spot exchange rate is $1 = x110. The importer can sell the computers the day they arrive for $1,600 each. However, the importer will not have the funds to pay the Japanese supplier until the computers have been sold. The importer enters into a 30-day forward exchange transaction with a foreign exchange dealer at $1 = x105. What is the profit or loss per computer if the exchange rate after 30 days is $1 = x90? Show your work.
Expert Answer:
Answer rating: 100% (QA)
To calculate the profit or loss per computer we need to consider the costs revenues and the effect o... View the full answer
Related Book For
Corporate Finance Core Principles And Applications
ISBN: 9781260571127
6th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
Posted Date:
Students also viewed these general management questions
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
As a Purchasing officer, you have been working for the city police department for the last 6 years and recently have been promoted to the role of Sourcing and Procurement Manager. Since the Police...
-
What are the values of m and n after executing the following code? int n = 123456789; int m= 0; while (n != 0) { } m (10 m) + (n % 10); n = n/ 10;
-
Predict the products from reaction of 5-decyne with the following reagents: (a) H2 Lindlar catalyst (b) Li in NH3 (c) 1 equiv Br2 (d) BH3 in THF, then H2O2, OH (c) H2O, H2SO4, HgSO4 (f) Excess H2,...
-
A binary system of species 1 and 2 consists of vapor and liquid phases in equilibrium at temperature T for which In y1 = 1.8x22 In y2 = 1.821. P1sat = 1.24 bar P2sat = 0.89 bar. Assuming the...
-
In 2019, Italia Mining Corporation had sales of \($69\) million, total assets of \($45\) million, and total liabilities of \($23\) million. The interest rate on the debt is 6.5 percent, and its tax...
-
A & L Mechanical sells and services plumbing, heating, and air-conditioning systems. A & Ls cost accounting system tracks two cost categories: direct labor and direct materials. A & L uses a...
-
4 16. The mean and variance of a binomial distribution area and respectively. If P(X = 1) = then P(X = 4 or 5) is equal to: 243 (a) 1/159 64 (b) $ 16 (c) 81 925 145 (d) 27 243 17. Let E1, E2, E3 be...
-
Assistant police chief Todd Beck wants to analyze the citys historic crime data in order to better allocate police resources in the future. He collects data over the past two years. Each record in...
-
Dillion Manufacturing was forced to shut down its operations for five days when the power transformer at the plant short-circuited. This is an example of which one of the following types of equipment...
-
Problems 45-50 show scatter diagrams along with a best-fitting line. Match the best-fitting line in each with an appropriate equation named \(\mathrm{A}-\mathrm{H}\). A. \(y=0.5 x-4\) B. \(y=-0.5...
-
Discuss the correlation shown by the following chart. Age-adjusted deaths per 100,000 population 30 25 20 15 10 0 5 Philippines. 0 Thailand 20 South Africa Venezuela Chile Panama Colombia Japan 40...
-
Carry out the following experiment: \(A\) cat has two bowls of food; one bowl contains Whiskas and the other contains some other brand. The cat eats Whiskas and leaves the other untouched. Make a...
-
The following data are the number of years of full-time education \((x)\) and the annual salary in thousands of dollars (y) for 15 persons. Is there a correlation between education and salary, and if...
-
In Problems 25-40, decide on a reasonable means for conducting the survey to obtain the desired information. A local political party would like to use a survey to determine the level of support among...
-
6. Which reagent will accomplish this transformation? H (C) (A) H, Pd/BaSO, quinoline (B) NaBH. (C) LAIH (DI Na, NH, 57. What is the product of this reaction sequence? (A) CH-C=C-CH G (D) CH-C-C...
-
A seasonal index may be less than one, equal to one, or greater than one. Explain what each of these values would mean.
-
In Problem 14, what is the cost of equity after recapitalization? What is the WACC? What are the implications for the firms capital structure decision? Data from Problem 14 Cede & Co. expects its...
-
An investment project has annual cash inflows of $5,100, $5,700, $6,200, and $6,400, and a discount rate of 12 percent. What is the discounted payback period for these cash flows if the initial cost...
-
Consider the following abbreviated financial statements for Weston Enterprises: WESTON ENTERPRISES 2020 Income Statement Sales....................$17,259 Costs.......................5,113...
-
An old-fashioned tire swing exerts a force on the branch and a torque about the point where the branch meets the trunk. If you hang the swing closer to the trunk, this will --the force and-- the...
-
Which of these objects is in static equilibrium? A. B. C. D.
-
A beam with a pivot on its le ft end is suspended from a rope. Tn which direction is the force of the pivot on the beam? A. B. C. D. E.
Study smarter with the SolutionInn App