Sola sa is a British company specialized in water supplies. It has a big activity, and wishes to reduce its risks. It operates in a challenging environment, and subject to fluctuations in prices on financial markets. It imports some raw materials from China, and sells to France and other European countries. Its Financial manager gives you the followings : Loans borrowed : GBP 100,000 at 5% Loans to employees : GBP 75,000 at 3% Money at bank: GBP 450,000 at 2% Calculate the net interest margin for Sola? What are the major risks facing the company? Could you identify the related examples?

Sola sa is a British company specialized in water supplies. It has a big activity, and wishes to reduce its risks. It operates in a challenging environment, and subject to fluctuations in prices on financial markets. It imports some raw materials from China, and sells to France and other European countries. Its Financial manager gives you the followings : Loans borrowed : GBP 100,000 at 5% Loans to employees : GBP 75,000 at 3% Money at bank: GBP 450,000 at 2% Calculate the net interest margin for Sola? What are the major risks facing the company? Could you identify the related examples?

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter6: Government Influence On Exchange Rates

Section: Chapter Questions

Problem 18QA

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