Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please help me! Thank you. Livingston Co. has a subsidiary in Korea. The subsidiary reinvests 64% of its net cash flows into operations and remits
Please help me! Thank you.
- Livingston Co. has a subsidiary in Korea. The subsidiary reinvests 64% of its net cash flows into operations and remits leftovers to the parent. Livingston's expected cash flows from domestic business are $171581, and the Korean subsidiary is expected to generate 362 million Korean won at the end of the year. The value of the won is $0.0012 at the end of the year. What are the expected dollar cash flows of Livingston Co.? (Please round up to a dollar and fill the blank with a number only.) --> (The answer is not 449,597)
- Kurnick Co. expects that the pound will appreciate from $1.28 to $1.64 per pound in 69 days. It has no money to invest, but it could borrow money to invest. It has been approved by a bank to borrow either 3 million dollars or 3 million pounds for one year. It can borrow dollars at an annual rate of 6.96% or British pounds at 5.67%. It can invest in a risk-free dollar deposit at an annual rate of 4.11% or a risk-free British deposit at 4.54%. Determine the expected profit (in dollars) if Kurnick Co. pursues a strategy to capitalize on the expected appreciation of the pound (Please round your answer up to a dollar and fill the blank with a number only. Please keep at least 6 decimals for the intermediate steps.) --> (The answer is not 837,267)
- Kurnick Co. expects that the pound will depreciate from $1.69 to $1.49 per pound in 145 days. It has no money to invest, but it could borrow money to invest. It has been approved by a bank to borrow either 2.4 million dollars or 2.4 million pounds for one year. It can borrow dollars at an annual rate of 6.31% or British pounds at an annual rate of 6.41%. It can invest in a risk-free dollar deposit at an annual rate of 4.03% or a risk-free British deposit at an annual rate of 4.3%. Determine the expected profit (in dollars) if Kurnick Co. pursues a strategy to capitalize on the expected depreciation of the pound (Please round your answer up to a dollar and fill the blank with a number only. Please keep at least 6 decimals for the intermediate steps.) --> (The answer is not 454,803)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started