Crane Pharma just received revenues of $3,164,400 in Australian dollars (A$). Management has the following exchange rates: A$2.69000/£ and $1.5906/£. What is the U.S. dollar value of the company’s revenues? (Round intermediate calculation to 4 decimal places, e.g. 15.2578 and final answer to the nearest whole dollar, e.g. 5,275.) Revenue $enter the revenue in dollars rounded to the nearest whole

Crane Pharma just received revenues of $3,164,400 in Australian dollars (A$). Management has the following exchange rates: A$2.69000/£ and $1.5906/£. What is the U.S. dollar value of the company’s revenues? (Round intermediate calculation to 4 decimal places, e.g. 15.2578 and final answer to the nearest whole dollar, e.g. 5,275.) Revenue $enter the revenue in dollars rounded to the nearest whole

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter7: International Arbitrage And Interest Rate Parity

Section: Chapter Questions

Problem 2BIC

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Crane Pharma just received revenues of $3,164,400 in Australian dollars (A$). Management has the following exchange rates: A$2.69000/£ and $1.5906/£. What is the U.S. dollar value of the company’s revenues? (Round intermediate calculation to 4 decimal places, e.g. 15.2578 and final answer to the nearest whole dollar, e.g. 5,275.) Revenue $_____________
Example 1: Kennedy Inc. is a US based MNC that conduct a part of its business in Oman. Its Omani sales are denominated in Omani Riyal. Its income statement from Oman business at the year-end is shown below: Income Statement Particulars Amount in OMR Sales 25000 Less: Cost of goods sold 8000 Gross Profit 17000 Operating expenses 11000 EBIT 6000 Interest Expenses 2000 EBT 4000 Exchange Rates: (a) The spot exchange rate = OMR 0.3850/USD (b) The average exchange rate = OMR 0.3780/USD (c) The historical exchange rate = OMR 0.3820/USD Requirement: Translate income statement into reporting currency by using the current rate method and temporal method.
Last year, the Mexican peso/U.S. dollar exchange rate was MXN13.3872/$. Today, the exchange rate is MXN16.5307/$. A U.S. firm has total assets worth MXN14,790,000 located in Mexico that did not change in value over the year. What was the change in the value of the assets in dollars on the company's U.S. balance sheet? Multiple Choice −$193,736.57 $210,087.71 −$210,087.71 $0 $193,736.57
MNC is a U.S. company with the following 1. Sales to Canada amounting to C$18 million. 2. Expenses of C$12 million for goods. 3. Interest expense on Canadian loans of C$2 million. Given these exact figures above, and no other C$ costs, all else being equal, the dollar value of MNC's earnings should: Group of answer choices increase with an appreciating C$ decrease with an appreciating C$ increase with a depreciating C$ remain unchanged
A foreign exchange trader with a U.S. bank took a speculative short position of £3,000,000 when the GBP/USD was 1.3322. Subsequently, the exchange rate has changed to 1.3366. If the position is closed now, what is the profit/loss arising from that trade? (USD, no cents)
The Simpson Corporation is calculating their adjusted balance sheet into U.S. Dollars. The exchange rate at the beginning of the year was $1 Euro = $1 U.S. dollar. The current exchange rate is .80 Euros to $1.00. Net Income for the year was zero. How much is the accounting gain/loss due to the exchange rate change? Beginning Balance Sheet: Assets = 3,000 EurosEquity = 1,500 EurosLiabilities = 1,500 Euros $125, gain $375, loss $375, gain $500, loss $500, gain
Last year, the Mexican peso/U.S. dollar exchange rate was MXN13.3769/$. Today, the exchange rate is MXN16.4196/$. A U.S. firm has total assets worth MXN14,680,000 located in Mexico that did not change in value over the year. What was the change in the value of the assets in dollars on the company's U.S. balance sheet? $187,009.61 −$187,009.61 $203,360.75 $0 −$203,360.75
Flynn Corporation purchased bicycles from a British manufacturer at a price of 45,000 British pounds on November 15, Year 1with payment due in 60 daysUsing the following exchange rateswhat gain or loss from currency fluctuations should be recognized in Year 1 and Year 2 respectively? Nov. 15, Year 1 1.70 per British pound Dec. 31, Year 1 1.75 per British pound Jan. 15, Year 2 $1.73 per British pound
On March 1, 20x1, ABC Co. sold inventory to a foreign company for FC 1,000,000 (FC means foreign currency) when the spot exchange rate is FC 40: ₱1. The payment is due on April 1, 20x1. ABC Co. is concerned about the possible fluctuation in exchange rates, so on this date, ABC Co. entered into a forward contract to sell FC 1,000,000 for ₱25,000 to a broker. According to the terms of the forward contract, if FC 1,000,000 is worth less than ₱25,000 on April 1, 20x1, ABC Co. shall receive from the broker the difference; if it is worth more than ₱25,000, ABC Co. shall pay the broker the difference. If the exchange rate on April 1, 20x1 is FC35: ₱1, how much is the net cash settlement? 3,571 receipt 3,571 payment 4,231 receipt 4,231 payment If the exchange rate on April 1, 20x1 is FC50: ₱1, how much is the net cash settlement? 5,000 payment 5,000 receipt 6,223 payment 6,223 receipt If the exchange rate on March 31, 20x1 is FC45: ₱1, how much is the fair value of the…
On March 1, Laton Products (a U.S. firm) purchased manu-facturing inputs from a Mexican supplier for 20,000 pesos, payable on June 1. The exchange rate for pesos on March 1was $0.17. If the exchange rate increases to $0.19 on June 1,what amount of gain or loss would be reported by Latonrelated to the currency exchange?a. $400 gain.b. $200 loss.c. $400 loss.d. $200 gain.
Iberico plc, a Spanish firm whose functional currency is EUR, sold goods to a British customer for 10,000 GBP on credit. The exchange rate on the date of sale was 1 GBP = 1.2 EUR. Which the journal entry shall Iberico plc prepare regarding the sale? a. DR Cash 12,000 EUR, CR Sale 12,000 EUR b. DR Receivable 10,000 GBP, CR Sale 10,000 GBP c. DR Cash 10,000 GBP, CR Sale 10,000 GBP d. DR Receivable 12,000 EUR, CR Sale 12,000 EUR
Given the following balance sheet of a US based MNC’s fully operational subsidiary, who operates in Japan and whose functional currency is the Japanese Yen, determine the amount of the translation exposure in dollars if the Yen depreciates by 10% from ¥110/$ to ~¥122/$ by applying the current rate method. Balance Sheet of Subsidiary in ¥ Assets Liabilities + Equity Cash ¥145,000 Accounts Payable ¥246,000 A/R ¥104,000 Short Term Debt ¥128,000 Inventory ¥275,000 Long term debt ¥329,000 PPE ¥895,000 Common Stock ¥534,000 Retained Earnings ¥182,000 Total ¥1,419,000 ¥1,419,000