Multinational Financial Management-90a76a

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Nov 24, 2024

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Multinational Financial Management Exchange rates of currencies, relative to the U.S. dollar Direct Quotation British pound 1.3068 0.7652 EMU euro 1.1813 0.8465 Japanese yen 0.009352 106.9290 Swiss franc 1.0994 0.9096 Key Currency Cross Rates Dollar SFranc Yen United Kingdom 0.7652 0.8413 0.007156 Euro 0.8465 0.9307 0.007917 Japan 106.9290 117.5577 1 Switzerland 0.9096 1 0.008506 United States 1 1.0994 0.009352 Forward exchange rates of the Swiss franc Forward Rates Spot Rate 30 days 90 days Swiss franc 0.9096 0.909030 0.907890 Cost of Component X SFr. 155 Cost of Component Y € 20 Cost of Component Z £90 Sale price of the SY-20 ¥47,500 a. Calculating the dollar cost to produce the SY-20 Formulas Cost of Component X (in dollars) $170.41 =B23*B8 Cost of Component Y (in dollars) $23.63 =B24*B6 Cost of Component Z (in dollars) $117.61 =B25*B5 Total cost of the SY-20 (in dollars) $311.65 =SUM(B29:B31) Calculating the dollar sale price of the SY-20 Sale price of the SY-20 (in dollars) $444.22 =B26*B7 b. Calculating the dollar and percentage profits that Yohe makes on the sale of the SY-20 Dollar profit $132.58 =B35-B32 Percentage profit 42.54% =B38/B32 c. If the U.S. dollar was to weaken against all foreign currencies, calculating the dollar and percentage profits for the SY-20 Dollar depreciation against all currencies 10% British pound 1.4375 =B5*(1+$B$43) EMU euro 1.2994 =B6*(1+$B$43) Japanese yen 0.0103 =B7*(1+$B$43) Indirect Quotation New Direct Quotation A B C D 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47

Swiss franc 1.2093 =B8*(1+$B$43) Cost of Component X (in dollars) $187.45 =B23*B48 Cost of Component Y (in dollars) $25.99 =B24*B46 Cost of Component Z (in dollars) $129.37 =B25*B45 Total cost of the SY-20 (in dollars) $342.81 =SUM(B50:B52) Sale price of the SY-20 (in dollars) $488.64 =B26*B47 Dollar profit $145.83 =B54-B53 Percentage profit 42.54% =B55/B53 d. If the U.S. dollar was to weaken only against the Japanese yen and remained constant relative to all other foreign currencies, calculating the dollar and percentage profits for the SY-20 Dollar depreciation against the Japanese yen 10% British pound 1.3068 =B5 EMU euro 1.1813 =B6 Japanese yen 0.010287 =B7*(1+B60) Swiss franc 1.0994 =B8 Cost of Component X (in dollars) $170.41 =B23*B65 Cost of Component Y (in dollars) $23.63 =B24*B63 Cost of Component Z (in dollars) $117.61 =B25*B62 Total cost of the SY-20 (in dollars) $311.65 =SUM(B67:B69) Sale price of the SY-20 (in dollars) $488.64 =B26*B64 Dollar profit $177.00 =B71-B70 Percentage profit 56.79% =B72/B70 e. Calculating the return on 1-year securities in Switzerland using the forward exchange Rate of return on 1-year securities in the USA 4.6% Time to maturity on the Swiss securities (in days) 180 Days in a year 360 Number of interest payments in a year 2 =B78/B77 Direct forward exchange rate of the Swiss franc 1.103530 =1/E21 Nominal annual interest rate on the Swiss securities 3.83% =((1+B76/B79)/(B80/B8)-1)*B79 f. Assuming that purchasing power parity (PPP) holds, calculating the sale price of the SY-20 if it was sold in the United Kingdom rather than Japan Sale price of the SY-20 (in pounds) £339.93 =B26/F14 New Direct Quotation A B C D 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85

Euro Pound 0.9040 1 1 1.1062 126.3152 139.7348 1.0745 1.1886 1.1813 1.3068 180 days 0.906183 E F 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47

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