Crane Industries has purchased equipment from a Brazilian firm for a total cost of 280,000 Brazilian reals. The firm has to pay in 30 days. Citibank has given the firm a 30-day forward quote of $0.3102/real. Assume that on the day the payment is due, the spot rate is $0.3425/real. How much would Crane save by hedging with a forward contract? (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.) Excel Template (Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values you’ve been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.) $enter the cost savings in dollars rounded to 2 decimal places Cost savings A Swiss sporting goods company borrows in yen in the Eurocredit market at a rate of 4.45 percent from Bank of America using a threemonth rollover loan. Bank of America assigns a default risk premium of 2.13 percent on the loan, and the country risk is an additional 0.75 percent. The bank can borrow funds in the Euromarket at the three-month LIBOR rate of 0.36 percent. What is Bank of America’s gross profit margin on this loan? (Round answer to 1 decimal places, e.g. 15.2.) Gro ss prof it mar gin enter the gross profit margin in percentages rounded to 1 decimal place % Save for Later Attempts: 0 of 2 used Submit Answer Current Attempt in Progress Management of Oriole, Inc., an electronic games manufacturer, is planning to purchase flash memory from one of two sources. Kyoto, Inc., quotes a price of ¥5,400 per gigabyte. The current exchange rate is ¥103.10/$. Another Japanese manufacturer offers to supply the same flash memory at a price of €56.60 per gigabyte. The spot rate available is ¥144.34/€. (Round answers to 2 decimal places, e.g. 15.25.) Vendor 1 C o s t f r o m Vendor 2 pe $enter your answer in r dollars rounded to 2 gi decimal ga by places te pe $enter your answer in r dollars rounded to 2 gi decimal ga by places te Which is the cheaper source of flash memory for Oriole? select between vendor 1 and vendor 2 flash memory fo has the cheaper source of View Policies Current Attempt in Progress Blossom Corp. has just made a sale to a British customer. The sale was for a total value of £130,000 and is to be paid 60 days from now. Blossom management is concerned that the British pound will depreciate against the U.S. dollar and plans to hedge this risk. The company’s bank informs management that the spot rate is $1.2100/£ and the 60day forward rate is $1.2000/£. If Blossom sells its pounds receivable at the forward rate, what is the dollar value of its receivables? (Round answers to 2 decimal places, e.g. 15.25.) Value of receivable s $enter the dollar value of the receivables rounded to 2 decimal places If it did not enter into a forward contract and the spot rate 60 days later is $1.1800/£, how much would the company lose by not hedging? (Round answers to 2 decimal places, e.g. 15.25.) Loss incurre d by not hedgin g $enter the loss incurred by not hedging in dollars rounded to 2 decimal places Save for Later Last saved 1 day ago. Saved work will be auto-submitted on the due date. Auto-submission can take up to 10 minutes. Sheridan Manufacturing Company has been growing at a rate of 5 percent for the past two years, and the CEO expects the company to continue to grow at this rate for the next several years. The company paid a dividend of $1.60 last year. If your required rate of return is 12 percent, what is the maximum price that you would be willing to pay for this company’s stock? (Round intermediate calculation and final answer to 2 decimal places, e.g. 15.25.) Maximu m price $enter the maximum price of the stock rounded to 2 decimal places Save for Later Ted McKay has just bought the common stock of Carla Vista Corp. Management of Carla Vista expects the company expects to grow at the following rates for the next three years: 45 percent, 40 percent, and 30 percent. Last year the company paid a dividend of $2.30. Assume a required rate of return of 11 percent. (a1) Incorrect answer icon Your answer is incorrect. Compute the expected dividend for the first year. (Round answer to 2 decimal places, e.g. 15.25) D $enter a dollar amount of the dividend for the first year rounded to 2 decimal 1 places Attempts: 2 of 2 used (a2) New attempt is in progress. Some of the new entries may impact the last attempt grading. Your answer is incorrect. Compute the expected dividend for the second year. (Round answer to 2 decimal places, e.g. 15.25.) D $enter a dollar amount of the dividend for the second year rounded to 2 decimal 2 places Save for Later Attempts: 1 of 2 used Submit Answer (a3) The parts of this question must be completed in order. This part will be available when you complete the part above. (a4)
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