Case summary:
The Person TC (Chief Executive officer of AP Company) has reported a loss of $5 billion in their revenue during the fourth quarter of 2016. This loss in the Company’s revenue was due to exchange rates changes. The impact on the company was significant, because the company’s revenue has reduced by 2% from an 8% increase.
The AP Company was engaged very much in hedging to protect from the foreign exchanges fluctuations. However, the appreciation of the dollar is much faster than forecasted so the company’s hedging activity has been unsatisfactory in order to protect the value of its overseas earnings.
Characters in the case:
- Company AP
- Person TC
To discuss: The reason why the strong Country U’s dollar has a negative impact on AP Company’s earnings.
Want to see the full answer?
Check out a sample textbook solutionChapter 10 Solutions
International Business: Competing in the Global Marketplace
- During the Great Recession (2007 - 2009), there was a higher percentage in higher education, where consumers globally invested their time and money. Both countries and individuals may believe higher education, such as attending a university or trade school, can help increase their incomes. “According to the United Nations Educational, Scientific, and Cultural Organization (UNESCO), enrollment in colleges and universities rose one-third in China and almost two-thirds in Saudi Arabia, nearly doubled in Pakistan, tripled in Uganda, and surged by three million—18 percent—in the United States”. (Greenlaw, 2018, p. 148). Research a country and provide the following information: Explain the citizens’ impact of education on earnings and unemployment rates. Provide percentage rates for each of the following education completion levels: did not complete high school high school graduates college graduates (associate degree or bachelor’s degree) graduate degree (master's degree or…arrow_forwardhow Nike manage the cost of production and become successful OR How Nike was unable to manage the cost of production and failed badly.arrow_forwardHow do you evaluate HSBC’s global reorganization and expansion in the post–financial crisis period?arrow_forward
- Referring to the case of Apple Inc. in 2020, Is Apple's position in the smartphone industry sustainable? Should Apple aim to be a ‘service’ first or a ‘hardware’ first company?arrow_forwardNeed a detailed and long self explanatory solution for the following questions In the UK referendum on EU membership in June 2016, why were most major British financial institutions against Brexit? Please provide referred sourcesarrow_forwardAll of the following are examples of contractions fiscal policy exceptarrow_forward
- What is the bunker surcharges how impact to oil prices?arrow_forwardWhat are the main arguments for the Fed's independence? (Check all that apply.) A. It would be less democratic for elected officials to control monetary policy. B. Monetary policy is too important to be left to politicians, who are not economists and have their own political interests at stake. C. An independent Fed makes a political business cycle less likely. D. Only an independent central bank can deal with a financial crisis without causing an increase in unemployment and inflation.arrow_forwardOn October 21, 2019, Charles Scharf officially assumed the role of CEO. Can he succeed in restoring the reputation of Wells Fargo as "the bank that always does the right thing"? This week's discussion will provide you with an opportunity to put yourself in the shoes of someone advising Mr. Scharf. What about the incentive system employed by Wells Fargo resulted in massive creation of fake accounts by the retail operation? And why did it only get worse from there?arrow_forward