Apple Inc. is a U.S.-based company, that designs, manufactures, and markets mobile communication and media devices,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Apple Inc. is a U.S.-based company, that designs, manufactures, and markets mobile communication and media devices, and personal computers. It also sells various related software, services, accessories, and third-party digital content and applications. The company offers iPhone, a line of smartphones; iPad, a line of multi-purpose tablets; and Mac, a line of desktop and portable personal computers, as well as iOS, macOS, watchOS, and tvOS operating systems. On September 30, Apple sold inventory to Yara International, a Norwegian company. The inventory was priced at NOK 46.65 million and payment is due in 180 days. Apple's multinational finance team collected the following currency and market quotes. Apple forecasts the Norwegian Krone (NOK) will be at about $0.1125/NOK in 180 days. Current spot rate ($/NOK) 180-day forward rate ($/NOK) Apple's WACC 180-day dollar interest rate 180-day krone interest rate 180-day dollar borrowing rate 180-day krone borrowing rate $0.1095 $0.1105 4.500% 2.000% 1.250% 4.000% 3.000% What would be the value of Apple's investment at the end of 180 days if it uses the proceeds from the money market hedge to invest in its own operations? (round to the nearest dollar) Apple Inc. is a U.S.-based company, that designs, manufactures, and markets mobile communication and media devices, and personal computers. It also sells various related software, services, accessories, and third-party digital content and applications. The company offers iPhone, a line of smartphones; iPad, a line of multi-purpose tablets; and Mac, a line of desktop and portable personal computers, as well as iOS, macOS, watchOS, and tvOS operating systems. On September 30, Apple sold inventory to Yara International, a Norwegian company. The inventory was priced at NOK 46.65 million and payment is due in 180 days. Apple's multinational finance team collected the following currency and market quotes. Apple forecasts the Norwegian Krone (NOK) will be at about $0.1125/NOK in 180 days. Current spot rate ($/NOK) 180-day forward rate ($/NOK) Apple's WACC 180-day dollar interest rate 180-day krone interest rate 180-day dollar borrowing rate 180-day krone borrowing rate $0.1095 $0.1105 4.500% 2.000% 1.250% 4.000% 3.000% What would be the value of Apple's investment at the end of 180 days if it uses the proceeds from the money market hedge to invest in its own operations? (round to the nearest dollar)
Expert Answer:
Answer rating: 100% (QA)
To calculate the value of Apples investment at the end of 180 days using the money market hedge we need to consider the interest rates spot rate and f... View the full answer
Related Book For
Accounting Principles Part 1
ISBN: 978-1118306789
6th Canadian edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow
Posted Date:
Students also viewed these finance questions
-
You are equally investing in two assets. The first asset is a portfolio with an expected return of 12 percent and a standard deviation of returns of 20 percent. The second is the risk-free asset with...
-
Explain with example Desirable and an undesirable functional dependency, Problems caused by undesirable functional dependencies, Ignoring undesirable functional dependencies
-
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...
-
Elgin Company has recently introduced budgeting as an integral part of its corporate planning process. An inexperienced member of the accounting staff was given the assignment of constructing a...
-
Use cylindrical shells to find the volume of the solid. 43. A sphere of radius r 44. The solid torus of Exercise 61 in Section 6.2 45. A right circular cone ith height h and base radius r
-
Smith Technologies Corporation has a constant growth rate of 3% per year and its stock currently sells for $27 a share.The last dividend was $1.50.The firm's beta is 1.3, the risk-free rate is 4%,...
-
What is the rate of return for a $\$ 14,000,20$-year investment that provides a payout of $\$ 1,000$ a year?
-
Kate Petusky prepared Addison Controls' balance sheet and income statement for 2013. Before she could complete the statement of cash flows, she had to leave town to attend to a family emergency....
-
If I assume the WACC= 9% and a growth rate of 5% after year 1. What would the FCF for Year 1 be? What would the market value of the common stock be? 3. ($ millions) Sales Actual Forecast X 0 Xr1 $...
-
On 1 October 2023 Pumice acquired the following non-current investments: (i) 80% of the equity share capital of Silverton at a cost of 13. 6 million (ii) 50% of Silverton's 10% loan notes at par...
-
A 3-phase, 400 V, 5 kW, star connected synchronous motor having an internal reactance of 10 is operating at 50% load, unity p.f. Now, the excitation is increased by 1%. What will be the new load in...
-
Michael Vaughn is preparing his balance sheet and income and expense statement for the year ending June 30, 2010. He is having difficulty classifying six items and asks for your help. Which, if any,...
-
When Switzerland becomes a dirty floater (web exercise). Log in to www.pacific .commerce.ubc.ca/xr. Explain the National Swiss Bank foreign exchange policy over the period 20082013. Would a partial...
-
Jonathan Lansing, a 47-year-old retail store manager earning $75,000 a year, has worked for the same company during his entire 28-year career. A major economic recession has caused massive layoffs...
-
Harvey and Marlyn Elliott are preparing their 2011 cash budget. Help the Elliotts reconcile the following differences, giving reasons to support your answers. a. Their only source of income is...
-
The McDonald family has prepared their annual cash budget for 2011. They have divided it into 12 monthly budgets. Although only one monthly budget balances, they have managed to balance the overall...
-
Program always deals with the____________. a. Relative address b. Logical address c. Physical address d. Absolute address
-
The vapor pressure of the liquid NH, is measured at different temperatures. The following vapor pressure data are obtained. Temperature, K P, mmHg 217.1 223.4 234.7 588.1 Calculate the enthalpy of...
-
Identify the journal and the specific column title(s) in which each of the following transactions is recorded. Assume the company uses a periodic inventory system. 1. Cash sale 2. Credit sale 3....
-
Yue Shin thinks it doesn't matter in what order the first four steps in the accounting cycle are completed, as long as they are all done before moving on to remaining steps. Do you agree or disagree...
-
Wolcott Warehouse Store has an August 31 fiscal year end and uses a perpetual inventory system. An alphabetical list of its account balances at August 31, 2014, follows. All accounts have normal...
-
The amplitude of a surface wave for which \(\lambda=0.050 \mathrm{~m}\) is \(5.0 \mathrm{~mm}\) at a distance of \(1.0 \mathrm{~m}\) from a point source. What is the amplitude of the wave (a) 10 m...
-
For the situation shown in Figure 17.16a, how many nodes are there along the line segment \(S_{1} S_{2}\) that connects the centers of the two sources? Data from Figure 17.16a (a) Both sources...
-
Given that the speed of sound waves in dry air is \(343 \mathrm{~m} / \mathrm{s}\), determine the wavelengths at the lower and upper ends of the audible frequency range \((20 \mathrm{~Hz}-20...
Study smarter with the SolutionInn App