Discuss possible impact on the firm assets and liabilities

Assignment Help Financial Management
Reference no: EM131566367

A US firm sells merchandise today to a British company £100000. The current exchange rate is $2.03/£, the account is payable in three months, and the firm chooses to avoid any hedging techniques designed to reduce exchange rate. Please discuss passible impact on the firm’s assets and liabilities.

Reference no: EM131566367

Questions Cloud

Returns on individual stock and the market portfolio : The security market line plots the historic relationship between returns on an individual stock and the market portfolio.
Interest-rate risk is a crucial issue in bank management : What are the implications to bank management when interest rates are rising? Explain with examples.
Explain what is too big to fail bank : Explain what is “Too Big To Fail Bank.” Provide examples. What are the concerns of the rise of these types of financial institutions?
National or central banks are the lenders of last resort : National or “Central” Banks are the ‘Lenders of Last Resort.’ What is the importance of being the Lender of Last Resort?
Discuss possible impact on the firm assets and liabilities : Discuss passible impact on the firm’s assets and liabilities.
What will total homemade dividend be next year : Ignoring taxes, what will Nike's total homemade dividend be next year?
Its excess cash to complete stock repurchase : What will the new earnings per share be if the firm uses 25 percent of its excess cash to complete a stock repurchase?
The present value of the difference in loan payments : calculate the new loan payments and then the present value of the difference in the loan payments.
How much of payment goes to principal how much to interest : In year-3, how much of the payment goes to principal how much to interest?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the firms cost of capital

What is the firm's cost of capital? - According to the CAPM, what rate of return does the firm have to offer to its creditors?

  How much was the original deposit

You opened a savings account at a bank and made an initial deposit. The account pays 8% interest compounded annually. You made no additional deposits and in exactly one year you close the account and take out off of the money. The balance at the time..

  Explain how you will ensure customer’s requirements are met

Explain how you will ensure customer’s requirements are met? Provide a strategy. What lessons can you learn from this case study.

  About the aftertax cost of debt

Mullineaux Corporation has a target capital structure of 70 percent common stock, 15 percent preferred stock, and 15 percent debt. Its cost of equity is 12 percent, the cost of preferred stock is 4 percent, and the pretax cost of debt is 5 percent. W..

  What is amount of australian dollar you expect to get back

What's the amount of Australian Dollar you expect to get back when you return to Melbourne?

  What is the real return on long-term corporate bonds

Consider the following information on different asset classes from 1926 through 2011. What is the real return on long-term government bonds? What is the real return on long-term corporate bonds?

  General dividend valuation model

According to the general dividend valuation model, a firm that reinvests all its earnings and pays no cash dividends can still have a common stock value greater than zero. How is this possible?

  Leasing restatements in the restaurant industry

"Leasing Restatements in the Restaurant Industry" Please respond to the following: From the case study, create an argument for the use of principles-based accounting for leases over rules-based accounting under GAAP, based on the financial statement ..

  Future project by undertaking a feasibility study

A firm evaluates a future project by undertaking a feasibility study. If the project is accepted it will reduce demand for existing products it sells.

  Assigns a three-year payback period to project

Jack is considering adding toys to his general store. He estimates that the cost of inventory will be $4,200. The remodeling expenses and shelving costs are estimated at $1,500. Toy sales are expected to produce net cash inflows of $1,300, $1,600, $1..

  Offer price and total amount firm will raise net of spread

Nano Manufacturing wants to issue 2 million new shares. It has 4 million shares outstanding, which its investment banking firm estimates $65 million. If the investment banking firm charges a 4% spread, calculate the offer price and total amount ($) t..

  If the united states paid exporters a subsidy

Would the United States gain from the combination of the export subsidy and import tariff? Would Canada? Explain.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd