As the new treasurer of Pear Computer. Inc one of your main tasks is to manage the company's foreign exchange activities. The company has recently lunched a new product in Europe and is expecting to generate significant revenues over the next 12 months Pear Computer already has other activities in Europe including manufacturing facilities where it has a significant number of employees etc.

Pear Computer is expecting to generate ?10 million in revenues this year and due to its manufacturing activities in Europe. The company will also incur ? 8 million of expences. There are no other revenues or expenses for pear computers in Europe.

What is Pear Computer's net exposure to euros this year? And are they LONG or SHORT Euros

IAs the new treasurer of Pear Computer. Inc one of your main tasks is to manage the company's foreign exchange activities. The company has recently launched a new product in Europe and is expecting to generate significant revenues over the next 12 months pear computer already has other activities in Europe including manufacturing facilities where it has a signicant number of employees etc. Pear Computer is expecting to generate 10 million in revenues this year and due to its manufacturing activities in Europe. The company will also incur 8 million Of expenses. There are no other revenues or expenses for pear computers in Europe. A) What is Pear Computer's net exposure to euros this year? And are they LONG or SHORT Euros B) Pear computer's need to fund it operations In Japan at the end of the year and would like to use any surplus funds from Europe for this activity. Assume that today is January lst and the company's year-end is December 31st. Using the following market rate what transactions calculate the expected amount of Yen that Pear computer's Japanese operations Should receive at year-end (ignore transaction cost) _ 3- Month Forward 6- Month Forward 12 -Month Forward C$l.2410- 30l C$1.2450- 80l C$1.2510- 30/ 1.2550- 80 / 110.20- 30/C$ 111.40-50/C$ lll.70- 80/C$ 112.10-20/C$ C) Calculate the 12-month forward Yen/ Euro cross rate using the table from Part B. (carry decimal to 4 places) D) Using the 12-month forward Yen/ Euro cross rate calculated in Part C above, calculate how many yen and Japanese subsidiary would receive at the year end directly 'om Europe if a Yen/Euro forward contract could be executed