They are tradable on recognised exchanges They normally mature in three-month cycles They require the payment of initial margin They allow hedging companies to take advantage of favourable movements They come in standardised contract sizes
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- Discuss the features that differetiateorganised exchanges from the over-the-counter marketWhich of the following statements are true about globaliza-tion methods? a. International licensing involves the creation of a new company that is owned by two or more firms from dif-ferent countries. b. Exporting involves contracts that allow a foreign com-pany to use a domestic company’s trademarks, patents, processes, or technology.c. Global sourcing involves the close coordination ofresearch and development, purchasing, marketing, andmanufacturing across national boundaries.d. A wholly owned international subsidiary is createdwhen a foreign government owns 100 percent of theequity in a U.S.-based firm.Prepare a second consolidated balance sheet for the MNE using the exchange rates you expect in the future. Determine how any reporting currency imbalance will affect the new consolidated balance sheet for the MNE. a) Prepare a transaction exposure report for Sundance and its affiliates. Determine if any transactions exposures are also translation exposures. b) Investigate what Sundance and its affiliates can do to control its transaction and translation exposures. Determine if any of the translation exposure should be hedged. Please provide excel formulas and screenshots
- Differential Analysis for a Lease or Buy Decision Sloan Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $3,140. The freight and installation costs for the equipment are $660. If purchased, annual repairs and maintenance are estimated to be $380 per year over the four-year useful life of the equipment. Alternatively, Sloan can lease the equipment from a domestic supplier for $1,600 per year for four years, with no additional costs. Prepare a differential analysis dated December 3, to determine whether Sloan should lease (Alternative 1) or purchase (Alternative 2) the machine. (Hint: This is a "lease or buy" decision, which must be analyzed from the perspective of the machine user, as opposed to the machine owner.) If an amount is zero, enter "0". Use a minus sign to indicate a loss. Differential Analysis Lease Equipment (Alt. 1) or Buy Equipment (Alt. 2) December 3 Lease Equipment (Alternative 1) Buy Equipment…Forward contracts are: Answer a. Contracts usually involving the exchange of a commodity or financial instrument. b. Easily resold c. Always standardized d. An agreement between more than two partiesInternational Accounting Standards and Bonus Compensation The International AccountingStandards Board (ww.ifrs.org) is a London-based independent organization that develops and interprets International Financial Reporting Standards (IFRS). The mission of the IASB is to develop asingle set of high-quality, globally accepted accounting standards. About 150 countries throughoutthe world either permit or require IFRS for publicly held companies in their country. The U.S.continues to use generally accepted accounting principles (GAAP) as developed by the U.S.-basedFinancial Accounting Standards Board (FASB). The FASB, under the guidance of the SEC, hasdeveloped a plan in which the FASB and the IASB work together to complete a convergence ofIFRS and GAAP. The timetable for convergence is not firmly set, but many believe it may be onlya matter of time before U.S. firms will be using IFRS or something very much like it. Some of thenotable differences between GAAP and IFRS are that IFRS does…
- Contract 1SkinPhD Ltd is a skin product company working with well-known skin product brands to distributetheir products. They are preparing their financial statements for the year ended 30 June 2022.In January 2022, the company bought the rights to a new product range called ‘Beautify’ fromVitaltea Ltd for a once-off fixed fee. No further costs associated with the acquisition of these rightswill be incurred. The company has entered the following contract:Vitaltea Ltd granted SkinPhD Ltd a license to sell the products in their selected stores in Gautengfrom February 2022 onwards. In accordance with the contract, SkinPhD Ltd paid Vitaltea Ltd afixed fee of R1 000 000 for these rights. SkinPhD Ltd is an independent salon with outlets inGauteng.REQUIRED:For the contract above and for the year ended 30 June 2022, describe how Vitaltea Ltd wouldaccount for revenue arising from it in accordance with the requirements of IFRS 15 ‘Revenue fromContracts with Customers’Which of the following eliminates settlement risk? Trans-European Automated Real-Time Gross Settlement Express Transfer System (TARGET) TARGET2 payment system Continuous Linked Settlement (CLS) Intercompany net settlement systems Real-Time Gross Settlement (RTGS) systemsReasons that a company might choose to acquire a business in a foreign country include all of the following except: Take advantage of free trade agreements Purchase local customer loyalty Local management understands local ing-hiet equatitions
- Gravity Services Ltd (GS) is a company set up in Hong Kong providing the region with cloud computingservices like servers, storage, networking and software, to help customers to meet their business challenges. During the year ended 30 September 2020, it enters into two contracts.(i) Data Tab Ltd (DT) enters into a contract with GS for the use of an identified server for three years.GS delivers and installs the server at DT’s premises in accordance with DT’s instructions, and provides repair and maintenance services for the server, as needed, throughout the period of use. GSsubstitutes the server only in the case of malfunction. DT can decide which data to be stored and howto integrate the server to its operation. DT can change its decisions on how to operate the serversthroughout the period of use (a) advise GS whether the contract (i) falls within HKFRS 16 as a lease.See below information from exercise 12-9Which of the following correctly matches the PHLX Currency Option Specifications to its Currency Contract Size? British pound GBP - 10,000 and New Zealand dollar NZD - 100,000 Australian dollar AUD - 100,000 and Japanese yen JPY - 10,000,000 Japanese yen JPY - 1,000,000 and Australian dollar AUD - 10,000 Euro EUR - 10,000 and Swiss franc CHF - 1,000
