BIC Co. is residing in Spain and exports bottles of wine in its Mexican Market for 225 Mexican Peso each bottle which costs BIC Co. 50 Pounds from wine distillery in United Kingdom. Exchange rates identified are the following for June 10, 2022: · 1 Euro = 15 Mexican Peso = 10 Pounds How much total gross profit in Euro doesBIC Co. made for June 10, 2022 considering the firm exported 3,000 wine bottles?
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BIC Co. is residing in Spain and exports bottles of wine in its Mexican Market for 225 Mexican Peso each bottle which costs BIC Co. 50 Pounds from wine distillery in United Kingdom. Exchange rates identified are the following for June 10, 2022:
· 1 Euro = 15 Mexican Peso = 10 Pounds
How much total gross profit in Euro doesBIC Co. made for June 10, 2022 considering the firm exported 3,000 wine bottles?
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- National Co. is residing in Spain and exports bottles of wine in its Mexican Market for 225 Mexican Peso each bottle which costs National Co. 50 Pounds from wine distillery in United Kingdom. Exchange rates identified are the following for June 10, 2022:· 1 Euro = 15 Mexican Peso = 10 PoundsHow much total gross profit in Euro does National Co. made for June 10, 2022 considering the firm exported 3,000 wine bottles?Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French supplier for 2,000 cases of wine at a price of 300 euros per case. The total purchase price is 600,000 euros. Relevant exchange rates for the euro are as follows: Date Spot Rate Forward Rateto October 31 Call Option Premiumfor October 31(strike price $1.50) September 15 $ 1.50 $ 1.56 $ 0.035 September 30 1.55 1.59 0.070 October 31 1.60 1.60 0.100 Vino Veritas Company has an incremental borrowing rate of 12 percent (1 percent per month) and closes the books and prepares financial statements at September 30. The wine arrived on September 15, and the company made payment on October 31. On September 15, Vino Veritas purchased a 45-day call option for 600,000 euros. It properly designated the option as a cash flow hedge of a foreign currency payable. Prepare journal entries…Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French supplier for 2,000 cases of wine at a price of 300 euros per case. The total purchase price is 600,000 euros. Relevant exchange rates for the euro are as follows: Date Spot Rate Forward Rateto October 31 Call Option Premiumfor October 31(strike price $1.50) September 15 $ 1.50 $ 1.56 $ 0.035 September 30 1.55 1.59 0.070 October 31 1.60 1.60 0.100 Vino Veritas Company has an incremental borrowing rate of 12 percent (1 percent per month) and closes the books and prepares financial statements at September 30. The company ordered the wine on September 15. It arrived on October 31, and the company made payment on that date. On September 15, Vino Veritas purchased a 45-day call option for 600,000 euros. It properly designated the option as a fair value hedge of a foreign…
- Jupiter Engine Company has recently negotiated contracts to sell 1 of its X-model engines to a customer in England and 1 of its Z-model engines to a customer in Germany. Jupiter will be paid in 3 months in the currency of its customers. The engine selling prices are: X-model 200,000 British pounds Z-model 265,500 Euros Jupiter’s costs to produce each engine in US dollars: X-model $225,000 Z-model $270,000 Today’s exchange rates: GBpound/US$ 1.20 US$ /Euro 0.90 Calculate Jupiter’s profits from each engine sale, based on today’s exchange rates. (Profit = Price in US dollars - costs in US dollars) Jupiter will not actually be paid for 3 months. If they choose not to hedge themselves against currency fluctuations by locking in today’s rate, they will either make less or more profit based on changes in the exchange rate. Would they prefer to see the US dollar get STRONGER or WEAKER during this period?…Panthers Corp., a U.S. importer of wine, placed an order with an Italian supplier for 500,000 bottles of wine, at a price of Euro 15 per bottle. Relevant exchange rates are as follows: Date Spot Rate Forward Rate (to January 31, 2020) 1-Nov-19 $1.119 $1.125 31-Dec-19 1.122 1.130 31-Jan-20 1.115 1.115 Panthers has an incremental borrowing rate of 12 percent (1 percent per month) and prepares the financial statements on December 31. Required a)Assume the wine was received on November 1, 2019, and payment was made on January 31, 2020. There was no attempt to hedge the exposure to foreign exchange risk. Prepare the journal entries to account for this import purchase. b)Assume the wine was received on November 1, 2019, and payment was made on January 31, 2020. On November 1, Panthers entered into a three-month forward contract to purchase Euro 7.5 million. The forward contract is properly designated as a cash flow hedge of a foreign currency payable. Prepare the journal entries to account…New Life is a multinational distribution company that started operating a Branch in Barbados on 1 January 2023. The company’s Head Office is in the Cayman Islands and is part of a group which earns more than USD 850 million for the year. It employed some of its staff from Barbados and imports good and services from the US, Cayman Islands, and other Caribbean countries. New Life repatriation policy is to transfer 50 % to 70% of its after-tax profits to the Cayman Islands. The company was of the view that for the first year of operation there was a window of no tax obligations. In December 2023, the company realized that their understanding was not correct and therefore engaged UWI Tax Consulting Services Limited to provide tax advisory and tax compliance services. Your Group was assigned this engagement. Required.Advice New Life of the tax matters that needs to be considered when operating in Barbadosincluding any tax benefits or incentives they may consider.
- Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French supplier for 1,000 cases of wine at a price of 200 euros per case. The total purchase price is 200,000 euros. Relevant exchange rates for the euro are as follows: Date Spot Rate Forward rate to October 31 Call option Premium for October 31 ( strike price$1.00) September 15 $1.00 $1.06 $0.035 September 30 1.05 1.09 0.070 October 31 1.10 1.10 0.100 Vino Veritas Company has an incremental borrowing rate of 12 percent (1 percent per month) and closes the books and prepares financial statements at September 30.a. Assume that the wine arrived on September 15, and the company made payment on October 31. There was no attempt to hedge the exposure to foreign exchange risk. Prepare journal entries to account for this import purchase.b. Assume that the wine arrived on September 15, and the company made payment on October 31. On September 15, Vino Veritas entered into a 45-day forward…Lost Pigeon Aviation, a U.S. company, produces and exports industrial machinery overseas. It recently made a sale to a Japanese manufacturing firm for ¥694 million, but the Japanese firm has 60 days before it must make the payment to Lost Pigeon Aviation The spot exchange rate is ¥132.78 per dollar, and the 60-day forward rate is ¥134.72 per dollar. Is the yen selling at a premium or at a discount in the forward market relative to the U.S. dollar? The yen is trading at a discount in the forward market. In the forward market, the yen is trading at a premium.Toyota sells Camrys in the U.S. for $23,000 when the exchange rate is 80 JPY/USD. If the exchange rate rises to 90¥ per dollar, what price would Toyota have to charge to receive the same amount of yen as before? $25,875 $25,553 $20,444
- Your firm is a U.S.-based supplier of agricultural parts. A European customer just made a €50,000 purchase on trade credit terms of net 30 days. At the time of the sale, the exchange rate was EUR/USD 1.19. The projected exchange rate in 30 days is EUR/USD 1.21. Calculate the value of accounts receivable on the date of the sale. a. $41,322.31 b. $42,016.81 C. $59,500.00 d. $60,500.00A U.S. firm exports products to a German firm and will receive payment of €200,000 in three months. On June 1, the spot rate of the euro was $1.12, and the 3-month forward rate was $1.10. On June 1, the firm negotiated a forward contract with a bank to sell €200,000 forward in three months. The spot rate of the euro on September 1 is $1.15. the firm will receive $_______ for the euros. 224,000 230,000 220,000 200,000Cocoa Beverage Plc exports goods to New York valued at $30,000. Receipt of payment is immediate on delivery of the goods, what is the value of pound sterling received, given that the exchange rate quote is $/£ 1.3500 – 1.4500. Where 1.3500 is the bid price and 1.4500 is the ask price.
