Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Each of the following U.S. Firms is expected to generate $45 million in net cash flows (after including the estimated cash flows from international sales

image text in transcribed

Each of the following U.S. Firms is expected to generate $45 million in net cash flows (after including the estimated cash flows from international sales if there are any) over the next year. Ignore any tax effects. Each firm has the same level of expected earnings. None of the firms has taken any position in exchange rate derivatives hedge exchange rate risk. All payments for the international trade by each firm will occur one year from today. euros. The dollar value of the payables (based on today exchange rate) from its imports during this year is $12 million. It has Sunrise Co. has ordered imports from Austria, and its imports are invoiced no international sales. Copans Co. has ordered imports from Mexico, and its imports are invoiced in U.S. dollars. The dollar value of the payables from its imports during this year is $17 million. It has no international sales. Yamato Co. ordered imports from Italy, and its imports are invoiced in euros. The dollar value of the payables (based on today's exchange rate) from its imports during this year is $19 million. In addition, Yamato exports to Portugal, and its exports are denominated in euros. The dollar value of the receivables (based on today's exchange rate) from its exports during this year is $6 million. Glades Co. ordered imports from Belgium, and these imports are invoiced in euros. The dollar value of the payables (based on today's exchange rate) from its imports during this year is $9 million. Glades also ordered imports from Luxembourg, and these imports are denominated in dollars. The dollar value of these payables is $35 million. Glades has no international sales. Based on this information, complete the table below. Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number Company Sunrise Copans Yamato Glades Amount of Foreign Currency Net Cash Flows (measured in $) million million million $ million Which firm exposed to the most exchange rate risk? -Select-vis exposed to the most exchange rate risk. Each of the following U.S. Firms is expected to generate $45 million in net cash flows (after including the estimated cash flows from international sales if there are any) over the next year. Ignore any tax effects. Each firm has the same level of expected earnings. None of the firms has taken any position in exchange rate derivatives hedge exchange rate risk. All payments for the international trade by each firm will occur one year from today. euros. The dollar value of the payables (based on today exchange rate) from its imports during this year is $12 million. It has Sunrise Co. has ordered imports from Austria, and its imports are invoiced no international sales. Copans Co. has ordered imports from Mexico, and its imports are invoiced in U.S. dollars. The dollar value of the payables from its imports during this year is $17 million. It has no international sales. Yamato Co. ordered imports from Italy, and its imports are invoiced in euros. The dollar value of the payables (based on today's exchange rate) from its imports during this year is $19 million. In addition, Yamato exports to Portugal, and its exports are denominated in euros. The dollar value of the receivables (based on today's exchange rate) from its exports during this year is $6 million. Glades Co. ordered imports from Belgium, and these imports are invoiced in euros. The dollar value of the payables (based on today's exchange rate) from its imports during this year is $9 million. Glades also ordered imports from Luxembourg, and these imports are denominated in dollars. The dollar value of these payables is $35 million. Glades has no international sales. Based on this information, complete the table below. Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number Company Sunrise Copans Yamato Glades Amount of Foreign Currency Net Cash Flows (measured in $) million million million $ million Which firm exposed to the most exchange rate risk? -Select-vis exposed to the most exchange rate risk

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Art Of Distressed M And A Buying Selling And Financing Troubled And Insolvent Companies

Authors: H. Peter Nesvold, Jeffrey Anapolsky , Alexandra Reed Lajoux

1st Edition

0071750193,0071750304

More Books

Students also viewed these Finance questions

Question

Write a short notes on Internal economies.

Answered: 1 week ago