Starbucks Inc. has Japanese yen 10 million payables due in 60 days and the company has the following information about the forward rates quoted in the Bank of America. What will be the dollar amount cost for the 10 million yen payables if the company uses the forward market for hedging? Bank of America Forward rates (Japanese yen) Bidate Ask rate 30 day $0.0091/yen $0.0092/yen 60 day $0.0093/yen $0.0095/yen O $95,000 ○ $91,000 O $92,000 $93,000

Starbucks Inc. has Japanese yen 10 million payables due in 60 days and the company has the following information about the forward rates quoted in the Bank of America. What will be the dollar amount cost for the 10 million yen payables if the company uses the forward market for hedging? Bank of America Forward rates (Japanese yen) Bidate Ask rate 30 day $0.0091/yen $0.0092/yen 60 day $0.0093/yen $0.0095/yen O $95,000 ○ $91,000 O $92,000 $93,000

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 8P: If a firm buys on terms of 3/15, net 45, but actually pays on the 20th day and still takes the...

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Cook Manufacturing (US): (Account Payable: Pay 10,000,000 Yen, 90 days from now) Spot rate : 100 Yen/$ Japan 3 month borrowing interest rate: 2.0% / 90 days Japan 3 month investment interest rate: 1.5% / 90 days How many USD will Cook Manufacturing convert into Yen today to pay the Japanese supplier 90 days from now.
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American Airlines is trying to decide how to go about hedging 70 million swiss francs in ticket sales receivable in 180 days. Suppose it faces the following exchange and interest rates. Spot rate: $0.6433-42/SFr Forward rate (180 days): $0.6578-99/SFr DM 180-day interest rate (annualized): 4.01%-3.97% U.S. dollar 180-day interest rate (annualized): 8.01%-7.98% What is the hedged value of American’s ticket sales using a money market hedge? Assume the first interest rate is the rate at which money can be borrowed and the second one the rate at which it can be lent. A $42,999,212 B $45,907,296 C $41,450,291 D $35,501,223
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