Question
Can someone please Help If not unsure kindly please let the others take turn... You work for firm PremiumV situated in the United States, and
Can someone please Help If not unsure kindly please let the others take turn... You work for firm PremiumV situated in the United States, and your boss has become concerned about the current economic environment, especially as it is related to the different types of exposures that your firm may face in the near future. You are asked to provide a report, which evaluates your firms exposure, the risk management implications for your firm, and possible hedging strategies. You are also required to provide a recommendation for what your firm should do. Word Count (1500) Information about Firm PremiumV: 1. Firm PremiumV is a car manufacturer located in the United State. 2. The firm imports parts to USA from foreign suppliers in Japan, South Korea and Mexico. 3. The firm exports cars to Australia, Canada, Germany and Norway. 4. The firm has a payment of 600,000,000 JPY due in 1 months to their Supplier 1 in Japan, a payment of 200,000,000 JPY due in 3 months to their Supplier 2 in Japan, a payment of 8,000,000,000 KRW due in 3 months to their Supplier in South Korea, and a payment of 10,000,000 MXN due in 3 months to their Supplier in Mexico. 5. The firm is due to receive 50,000,000 AUD from their customer in Australia in 3 months, 50,000,000 CAD from their customer in Canada in 6 months, 20,000,000 EUR from their customer in Germany in 3 months and 100,000,000 NOK from their customer in Norway in 3 months. 6. At the moment, the firm imports tires from Japan. The firm hopes to manufacture their own tires. The management of the firm is evaluating the feasibility of establishing a tire factory in Poland. Based on the analyses performed in 2021, the net present value of this project is positive. However, the management is unsure how the current geopolitical tension in Europe is going to affect the prospect of this project. 7. The firm is concerned about the impacts of the high inflation rate globally on their business. 8. The firm is also concerned about the impacts of a series of interest rate rises globally on the firm. You are required to prepare a report, which should contain the following information:
1. List the exchange rates that directly affect your firm and form a general market view for these exchange rates. You need to briefly analyse the factors affecting these exchange rates and then form your market view.
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