What should you do in given situation

Reference no: EM132067291

Question: You manufacture wine goblets (fine glassware) in the U.S. In mid-June you receive an order for 10,000 goblets from Japan. You will ship the order to the Japanese customer in mid-December and payment of ¥400,000 is due at that time. You expect the yen to rise from its present rate of $1=¥130 to $1=¥100 by December. You can borrow yen at 6% per year. What should you do? (1-2pages.)

Hint: There are different ways you can handle this transaction in your business. It is a common issue that exporters often face. There is no one right answer. Think about the possible scenarios, work the numbers, and select a course of management action that makes sense for your company. You should identify the pros and cons of each choice in writing up your answer. Note also that in possibly borrowing yen assume that you will convert it into dollars and invest in a US financial institution and then convert it back to yen when it comes to pay the loan back.

Reference no: EM132067291

Questions Cloud

Explain each of the major guidelines of the ima code : This question pertains to Cost Accounting: In pursuing organizational strategy, cost and management accountants want to instill trust between.

Decrease the after-tax cost of debt for firm : Which one of the following will decrease the after-tax cost of debt for a firm?

What are the biggest most important challenge : What are the biggest most important challenge(s) currently faced by Spotify? Name at least two of its competitors in the market. Name at least one strategy.

What could be the economic impacts : Consider that the attack has significantly affected a major form of public transit for a major city.

What should you do in given situation : You manufacture wine goblets (fine glassware) in the U.S. In mid-June you receive an order for 10,000 goblets from Japan.

What is the best estimate of the stock current market value : The required return on this low-risk stock is 9.00%. What is the best estimate of the stock’s current market value

Assuming the firm goes through with the recapitalization : Calculate the return on equity (ROE) under each of the three economic scenarios assuming the firm goes through with the recapitalization.

Calculating the company wacc : Jabila Corporation is an all equity company with common and preferred shares. There are 600,000 common shares outstanding. Currently the common shares have.

Calculate earnings per share under each of three economic : Calculate earnings per share (EPS) under each of the three economic scenarios assuming the company goes through with recapitalization.

User Account

All Pages