Determine the profitability of the international business

Assignment Help Business Management

Reference no: EM132834597

Using the information above, create a short business memo that explains the profitability, viability, and importance of considering foreign exchange on the basis of the scenarios below.

Scenario 1: The company uses the spot rate on April 1st to convert its sales revenue in MYR to U.S. dollars.

Scenario 2: On January 1st, the company uses that day's forward rate today to lock in a foreign exchange rate for its expected 1.25 million MYR in sales. This means the company agreed to exchange 1.25 million MYR using the forward rate on January 1st when April 1 arrives.

Scenario 3: Another option for the company is to spend the foreign currency and avoid any currency exchange. Because it is a manufacturing company, raw materials are always needed.

Specifically, you must address the following rubric criteria:

-Foreign Exchange Calculations: Determine the profitability of the international business by using foreign exchange calculations for the first and second scenarios.

-Spend or Save: Discuss what you would need to consider when determining if the company should buy raw materials with the foreign currency in an effort to avoid foreign exchange risk and whether this is a viable option for the company.

Reference no: EM132834597

Questions Cloud

What would it help you focus on : What theory/model/framework do you think would be beneficial for understanding federal educational policy approach under the Trump administration? (there is no

Case study-the equifax data breach : Which elements of this case might involve issues of legal compliance? Which elements illustrate acting legally but not ethically? What would acting ethically an

Various grouping and consolidation tools available in excel : Under what circumstances would I use any of these features? Do they both serve the same purpose, or is each one used under different scenarios? Examples.

What are the aspects of a diverse organization : Explanation of how managers and leaders can promote positive social change from within their roles in diverse organizations.

Determine the profitability of the international business : -Foreign Exchange Calculations: Determine the profitability of the international business by using foreign exchange calculations for the first and second scenar

How do business events turn into data : Give an example starting with the business event of the purchase all the way to useful information for the CEO and other decision makers.

Content standards are the roadmap for student learning : History (Social Studies) middle school. Louisiana, USA. profile Charter School USA is the organization. South Baton Rouge Charter is the name of the school.

Interruption depending on the charterparty clauses : Please consider what can be classified as an interruption depending on the charterparty clauses.

What observation research would you have conducted : If you were a Delta Research Executive, what observation research would you have conducted during this massive endeavor to judge the effectiveness of the move?

User Account

All Pages