Atreides International has operations in Arrakis. The balance sheet for this division in Arrakeen solaris shows assets of 39,000 solaris, debt in the amount of 11,000 solaris, and equity of 28,000 solaris. Assume the equity increases by 1,250 solaris due to retained earnings. If the exchange rate at the end of the year is 1.54 solaris per dollar, what does the balance sheet look like? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Assets Assets Balance Sheet (dollars) Debt Equity Total debt & equity Liabilities

Atreides International has operations in Arrakis. The balance sheet for this division in Arrakeen solaris shows assets of 39,000 solaris, debt in the amount of 11,000 solaris, and equity of 28,000 solaris. Assume the equity increases by 1,250 solaris due to retained earnings. If the exchange rate at the end of the year is 1.54 solaris per dollar, what does the balance sheet look like? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Assets Assets Balance Sheet (dollars) Debt Equity Total debt & equity Liabilities

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Space-X Corporation, located in the United States, has an accounts payable obligation of $750…

A: Step 1: Accounts payable obligation: $750 millionSpot rate: ¥116/$Forward rate: $115/¥Expected spot…

Q: Grupo Bimbo, although Mexican by incorporation, evaluates all business results, including financing…

A: We will fist have to convert the amount to be borrowed at the current spot rates in the foreign…

Q: Japan Life Insurance Company invested $10,000,000 in pure-discount U.S. bonds in May 1995 when the…

A: The rate of return of an investment refers to the profits that the investment provides to the…

Q: In a daily meeting, the Chief Financial Officer (CFO) gave Ari the following table of market rates:…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: A Canadian company has a division in Mexico. The Canadian company needs to borrow money for its…

A: When a company has various alternatives to borrow money it should evaluate each alternative…

Q: Suppose that Cleveland Co. engages in international business, with transactions denominated in four…

A: We need to calculate the net inflow or outflow for each currency and then convert these amounts into…

Q: Companies A and B are able to receive the following rates per annum on a $10 million, 5-year…

A: Swaps are one of the types of financial derivatives which are used to exchange one underlying asset…

Q: ICU Window, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding…

A: Yield to maturity refers to the internal rate of return which is earned by the investor who makes…

Q: In 20X2, Canterra Company invested $2,600,000 CDN (800,000FC) to establish a foreign subsidiary,…

A: Exchange rate to be used for Translation S.No Particulars Rate to be used a All Assets Closing…

Q: Required: Japan Life Insurance Company Invested $10,000,000 in pure-discount U.S. bonds in May 1995…

A: The rate of return of an investment refers to the profits that the investment provides to the…

Q: ssume that the spot rate e = ¥124.5/$ and the three-month forward rate f = ¥ 127/$. Assume further…

A: The exchange rate moves with the change in interest and there will be equilibrium in the market in…

Q: ABC Corporation agreed that it will buy 1,000 USD at an exchange rate of P52 one month from now. The…

A: Transaction amount = $ 1000 Agreed exchange rate = P 52 Actual exchange rate = P 54

Q: uppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a…

A: Yield on repo = (buy back price / purchase price of bond) - 1 )* (days base / days to maturity )

Q: You are the vice president of Worldwide InfoXchange,headquartered in Minneapolis, Minnesota. All…

A: Exchange rate is the rate at which a value of currency of one country can be exchanged with the…

Q: The World Bank forecasted growth of world trade to be 12.00%, up from 17.50%. This change caused…

A: Bank reconciliation statement :— It is the statement that shows the reconciliation of balance as per…

Q: Carry Trade, Inc., borrows yen when the yen is trading at ¥120/US$. If the nominal annual interest…

Q: In a daily meeting, the Chief Financial Officer (CFO) gave Ari the following table of market rates…

A: According to interest rate parity theorem, interest rate differentials between two currencies…

Q: A bank in London, Ontario charges 1.75% commission to buy and sell currencies. Assume that the…

A: USD sold = $1,310Exchange rate = 1.3973Commission rate = 1.75%

Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

Atreides International has operations in Arrakis. The balance sheet for this division in Arrakeen solaris shows assets
of 39,000 solaris, debt in the amount of 11,000 solaris, and equity of 28,000 solaris. Assume the equity increases by
1,250 solaris due to retained earnings. If the exchange rate at the end of the year is 1.54 solaris per dollar, what does
the balance sheet look like?
Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.
Assets
Assets
Balance Sheet (dollars)
Debt
Equity
Total debt & equity
Liabilities

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

BP is one of the largest international companies in the oil & gas industry. The company has transactions denominated in several currencies. Being a British company, the domestic currency used for valuation is the British pound. In 3 months, BP is due to receive a 41.5m ZAR reimbursement from a major subsidiary in South Africa. You have the following information: Table 1: Bank’s spot and forward rates (in points) Bid Ask GBPZAR 19.6971 19.7183 GBPZAR 3M FWD 3104.8000 3139.0000 Table 2: CME Currency Futures Settlement Contract Units GBPZAR 3M 19.8911 125,000 Table 3: OTC Currency Options Strike Call (in £) Put (in £) GBPZAR 19.8925 0.031 0.025 The spot exchange rate in 3 months is expected to be either 19.7762 or 20.1556. Calculate the outcome of hedging using forwards. Calculate the outcome of hedging using futures. Calculate the outcome of hedging using options. Recommend a…
Assume that a firm issues $500,000,000 of U.S. commercial papers (and therefore uses a 360-day year for CP calculations) with a 30-day maturity at a discount of 0.5%. The annualized dealer fee is 0.175% and the cost of a backup line of credit is 0.25%. a. What is the amount of usable funds? b. What is the amount of dealer fee? c. What is the amount of backup line of credit? d. What is the annualized cost of the paper?
In a daily meeting, the Chief Financial Officer (CFO) gave Ari the following table of market rates: Spot exchange rate: Yen 106/$ U.S. dollar interest rate per annum 10% Japanese Yen interest rate per annum 6% and told Ari that the company’s financial analyst expected the Japanese Yen to depreciate against the U.S. dollar by 3.46% in 90 days. Assume there are 360 days in a year, and all interest rates are simple interest rates.If the financial analyst’s prediction about the US dollar and Japanese Yen turned out to be true: 1) What would the spot exchange rate (Yen/$) be in 90 days? 2) Would Ari make a profit by borrowing 1 million US dollar and investing in the money markets? If yes, how much profit would Ari realise in 90 days? If no, explain why. Please answer 2). Thanks
In a daily meeting, the Chief Financial Officer (CFO) gave Ari the following table of market ratesSpot exchange rate: Yen 106/$U.S. dollar interest rate per annum 10%Japanese Yen interest rate per annum 6%and told Ari that the company’s financial analyst expected the Japanese Yen to depreciate against the U.S. dollar by 3.46% in 90 days. Assume there are 360 days in a year, and all interest rates are simple interest rates. If the financial analyst’s prediction about the US dollar and Japanese Yen turned out to be true: Would Ari make a profit by borrowing 1 million US dollar and investing in the money markets? If yes, how much profit would Ari realize in 90 days?If no, explain why.
Megahurtz International Car Rentals has rent -a-car outlets throughout the world. It keeps funds for transaction purposes in many foreign currencies. Assume that in 200XX it held 100,000 reals in Brazil worth $42,000. It earned. 12 percent interest, but the real declined 20 percent against the dollar. a. What is the value of its holdings, based on Canadian dollars, at year-end? ( Do not round intermediate calculations.) Value of the holdings Sb. What is the value of its holdings, based on Canadian dollars, at year end if it earned 9 percent and the real went up by 10 percent against the dollar? (Do not round intermediate calculations.) Value of the holdings S
The treasurer of a major U.S. firm has $38 million to invest for three months. The interest rate in the United States is .55 percent per month. The interest rate in Great Britain is .59 percent per month. The spot exchange rate is £.76, and the three-month forward rate is £77. Ignore transaction costs. a. If the treasurer invested the company's funds in the U.S., how much would the investment be worth after three months? Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89. b. If the treasurer invested the company's funds in Great Britain, how much would the investment be worth after three months in U.S. dollars? Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89. a. U.S. investment b. Great Britain investment
At the beginning of year 1 the Terranian central bank conducted TEK100 million of dollar selling/terranian kwacha buying intervention. The intervention was undertaken at the rate of 1 dollar per kwacha and immediately afterwards the currency strengthened to 11 dollars per kwacha and stayed there. At the end of year 5 the exchange rate is still at 1.1 whilst kwacha 1 year interest rates are (and have always been) 4% whilst dollar 1 year interest rates are (and have always) been 0.25%. What is the profit/loss of the intervention at the end of year 5 in million Kwacha? Quote you answer to 1 decimal place and express a loss by putting a'in front of your answer (if a profit do not put a '+ Answer: Next pi
Lafayette Group (U.S.). The Lafayette Group, a private equity firm headquartered in Boston, borrows £5,000,000 for one year at 7.375% interest. a. What is the dollar cost of this debt if the pound depreciates from $2.0260 = £1.00 to $1.9460 = £1.00 over the year? b. What is the dollar cost of this debt if the pound appreciates from $2.0260 = £1.00 to $2.1640 = £1.00 over the year? a. What is the dollar cost of this debt if the pound depreciates from $2.0260 = £1.00 to $1.9460 = £1.00 over the year? % (Round to two decimal places.) b. What is the dollar cost of this debt if the pound appreciates from $2.0260 = £1.00 to $2.1640 = £1.00 over the year? % (Round to two decimal places.)
TNB has a 10-year, ¥50 million loan outstanding with a Japanese bank. The Yen loanhas a 2.5% annual interest rate. The loan was taken 5 years ago and so has 5 more yearsto go. Daibochi, a Japanese plastics maker with operations in Malaysia has justnegotiated a RM 5 million, 5-year loan with Maybank at 7.5% annual interest. Bothcompanies are worried about the foreign exchange exposure. Design a currency swapthat will enable both companies to manage exchange rate risk. (Assume debt servicingwill be on 6-monthly basis, the spot Yen/Ringgit rate is 10 Yen/Ringgit).
You are working for an imports-exports company. In the current financial year, your company has a net income of $851,000 and plans to use a part of it as retained earnings for a new project which will cost $500,000 next year. The company’s stock is currently listed and actively traded on ASX. Required: Your company has an extra cash of A$216 000. The AUD/USA exchange rate in New York is 0.77923. The USD/AUD rate in Sydney is 1.29135. Is there any arbitrage profit possible? Set up an arbitrage scheme with the extra cash, disregarding bid-ask spread. What is the potential gain in AUD dollar?
Suppose that Cleveland Co. engages in international business, with transactions denominated in four different foreign currencies: the euro, the Canadian dollar, the Australian dollar, and the Mexican peso. The company wishes to measure its cash flows in a single currency, the dollar, over the next quarter. The following table shows the total cash inflows and outflows for each currency, along with the expected exchange rate for that currency. For each row in the table, enter the net inflow or outflow in that currency for the MNC. Then, enter the dollar value of that inflow or outflow in the last column of the table. Total Inflow (Millions) 30 euros Note: Remember to enter a negative sign if a value is negative. Currency Euro Net Inflow or Outflow (Millions) Total Outflow Expected Exchange (Millions) Rate Net Inflow or Outflow, In Dollars (Millions) 15 euros euros $1.20 Canadian Dollar $C30 $C20 C$ $0.90 +A Australian Dollar $A10 $A20 A$ $0.50 Mexican peso 20 pesos 30 pesos peso $0.10 +A…
Viserion, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 16 years to maturity that is quoted at 107 percent of face value. The issue makes semiannual payments and has an embedded cost of 4 percent annually. a. What is the company's pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the tax rate is 25 percent, what is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) а. Pretax cost of debt % b. Aftertax cost of debt %