Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. question 11 you are a us company which makes surgi

QUESTION 11 You are a US company which makes surgical masks. Recently you decided to...

50.1K

Verified Solution

Question

Finance

image

QUESTION 11 You are a US company which makes surgical masks. Recently you decided to expand the company internationally and you are going to start first in the European Union (EU). You will have employees based in Europe and in the US. Your forecast for next year is below. In the forecast, any item marked as an EU item is actually the US dollar equivalent of Euro which has been translated at the EUR forward rate. Spot EUR FX rate: 1.20 Forward EUR FX rate: 1.22 (all numbers expressed as $USD '000) Revenues US revenues $5,000 EU revenues $3,000 Costs US salaries ($2,000) EU salaries ($1,000) You decide that you are not going to hedge your exposure. Since you have not hedged your exposure, what is your FX exposure gain or loss from your forecast if the exchange rate next year is actually 1.022 ($400) loss $125 gain $850 gain ($328) loss

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

You are a financial adviser. Your client is thinking of investing $800.00 at the end...

Calculus
1.2K views

For the polynomial below, 2 is a zero.g(x)=x - 8x + 16x - 8Express g...

Algebra
1.2K views

What is the solution of the quadratic equation 2x 5x 1 0 Solve by using...

Algebra
1.2K views

Simplify the expression using complex numbers V 64

Accounting
1.2K views