Foreign exchange - maximum loss, Financial Management

Assignment Help:

Q. Foreign exchange - Maximum loss?

From Marton's point of view an adverse outcome is depreciation of the dollar against sterling as this lowers its income when converted into sterling. The most awful outcome is thus an exchange rate of US$1.60:£1.

Presently its dollar income is £5m × 1.45 = $7.25m. At US$1.60:£1 its sterling income would fall to $7.25m/1.60 = £4.53m. Therefore the worst outcome is a loss (compared to the current rate) of (£0.47m).


Related Discussions:- Foreign exchange - maximum loss

Calculate the net present value, Tri-City Industries is considering two pos...

Tri-City Industries is considering two possible capital projects. Project A requires an initial investment of $240,000 and provides cash flows before tax of $120,000 in year one, $

Describe the money market products, Question 1 Under a hire purchase de...

Question 1 Under a hire purchase deal structured by X Finance Ltd. for Y Corporation, the finance company has offered to finance the purchase of equipment that costs Rs. 200 la

Why do financial managers calculate the marginal tax rate, Why do financial...

Why do financial managers calculate the marginal tax rate? Financial managers utilize marginal tax rates to calculate the future after-tax cash flows from investments.  Ever si

20x6 the balances in the several accounts , At the end of March, 20X6 the ...

At the end of March, 20X6 the balances in the several accounts of Nitin & Company are as follows:

Financial and management accounting, the salaries paid in 2004 is rs 500000...

the salaries paid in 2004 is rs 500000 outstanding is rs 20000 salaries paid in advance for 2004 is rs 30000 what is the actual salary expenditure for 2004 which accounting princip

Explain profit maximization approach, Q. Explain Profit Maximization Approa...

Q. Explain Profit Maximization Approach? (i) Best Criterion on Decision-Making:- The goal of revenue maximization is regarded as the best criterion of decision-making as it off

Capital Asset Pricing Model , What is Capital Asset Pricing Model? Please ...

What is Capital Asset Pricing Model? Please provide me report on Capital Asset Pricing Model. It is about 2000 words count report on topic Capital Asset Pricing Model.

''a'' priori probability, 'A' Priori Probability This is a probability ...

'A' Priori Probability This is a probability computed by rationally examining existing information. A priori probability can most simply be explained as making a conclusion on

Treasury bonds, Bonds issued by the government are termed as treasury...

Bonds issued by the government are termed as treasury bonds. For example, dated securities issued by the government. These bonds are normally issued for longer ma

Write Your Message!

Captcha
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