User Account

All Pages

How much would be the initial transaction commission

Assignment Help Financial Accounting
Reference no: EM132949103

Berlin Aerospace Company is a multinational company with its headquarter in Germany and has 4 subsidiaries A, B, C, and D that are all located in Eurozone. It is the end of the company's financial year and all the subsidiaries must settle their accounts with each other. The Chief Financial Officer (CFO) of the company has asked for your help to reduce the company's foreign exchange exposure and transaction cost.

You are given the following information:

i. Subsidiary A must pay €8 million to subsidiary B.

ii. Subsidiary B must pay €2 million to subsidiary D.

iii. Subsidiary D must pay €4 million to subsidiary C.

iv. Subsidiary C must pay €7 million to subsidiary A.

v. Subsidiary A must pay €3 million to subsidiary D.

vi. Subsidiary B must pay €6 million to subsidiary C.

vii. The commission for every €1,000,000 transaction is €10,000.

Problem a. Calculate how much would be the initial transaction commission if there is no reduction in number and volume of the transactions.

Problem b. By using tables or graphs show (and discuss) how much you can reduce the company's foreign exchange exposure.Please explain your working and solution.

Problem c. How much the company would save on transaction commissions based on your answer in part (b) of this question.

Reference no: EM132949103

Questions Cloud

What effective annual rate results from daily compounding : a. What effective annual rate results from daily compounding of 8% (Assume 365 days)?
Prepare finance costs on the outstanding liability : Prepare finance costs on the outstanding liability for the year ended December 31, 2018 assuming that the company was using the ASPE accounting platform.
How much is the over allowance : How much is the Over (Under) Allowance? How much is the Gain or Loss on Repossession? how much is the balance of the Trade In and the Repossessed Item?
Explain the combinations of ownership : Dispersed Ownership and Weak Control, Explain the combinations of ownership and control around world and critically discuss their advantages and disadvantages.
How much would be the initial transaction commission : By using tables or graphs show (and discuss) how much you can reduce the company's foreign exchange exposure.Please explain your working and solution.
What discount rate should peter pet foods use to evaluate : Tim's Toys specializes in pet toys and has a WACC of 10.5 percent. What discount rate should Peter's Pet Foods use to evaluate this investment?
List the barriers that prevent financial markets : List the barriers that prevent financial markets from becoming completely integrated and then critically review the motives for investing
Calculate the inventory turnover ratio and number of days : Discuss each of these ratios states about the company's efficiency in managing its inventory, and how they compare to the industry average.
What is the financial leverage of the company : A company generates ROA of 3.5% and has sales of $3,400, What is the ROE of the company? ?What is the financial leverage of the company?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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