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Spitz Company ordered merchandise from a foreign supplier on November 20 at a price of 112,000...
Spitz Company ordered merchandise from a foreign supplier on November 20 at a price of 120,000...
Spitz Company ordered merchandise from a foreign supplier on November 20 at a price of 120,000 forints when the spot rate was $0.29 per forint. Delivery and payment were scheduled for December 20. On November 20, Spitz acquired a call option on 120,000 forints at a strike price of $0.29, paying a premium of $0.02 per forint. It designates the option as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is...
Spitz Company ordered merchandise from a foreign supplier on November 20 at a price of 101,000...
Spitz Company ordered merchandise from a foreign supplier on November 20 at a price of 101,000 forints when the spot rate was $0.51 per forint Delivery and payment were scheduled for December 20. On November 20, Spitz acquired a call option on 101.000 forints at a strike price of $0.51. paying a premium of $0.02 per forint. It designates the option as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is...
CASE THREE, ALEXANDER Inc. Sometimes in November Year 1 (Y1), Alexander Inc., a US based importer...
CASE THREE, ALEXANDER Inc. Sometimes in November Year 1 (Y1), Alexander Inc., a US based importer of olive oil placed an order for 500 cases of olive oil at a price of 100 Euros per case. The pertinent exchange rates are given below. DATE SPOT FORWAR RATE CALL OPTION PREMIUM FOR RATE (to January 31, Y2) 1/31/Y2 (Strike price of $1) 12/1/Y1 $1.00 $1.08 $0.04 12/31/Y1 $1.12 $1.20 $0.12 1/31/Y2 $1.15 $1.15 ...
On June 1, Cairns Corporation purchased goods from a foreign supplier at a price of 1,400,000...
On June 1, Cairns Corporation purchased goods from a foreign supplier at a price of 1,400,000 francs and will make payment in three months on September 1. On June 1, Cairns acquired an option to purchase 1,400,000 francs in three months at a strike price of $0.779. Relevant exchange rates and option premiums for the franc are as follows: Call Option Premium for September 1 (strike price $0.779) $ 0.004 Spot Rate 0.779 0.784 Date June 1 June 30 September...
34. On June 1, Cairns Corporation purchased goods from a foreign supplier at a price of...
34. On June 1, Cairns Corporation purchased goods from a foreign supplier at a price of 1,000,000 francs and will make payment in three months on September 1. On June 1, Cairns acquired an option to purchase 1,000,000 francs in three months at a strike price of $0.852. Relevant exchange rates and option premiums for the franc are as follows: Date June 1 June 30 September 1 Spot Rate $0.852 0.858 0.872 Call Option Premium for September 1 (strike price...
Zorba Company Zorba Company, a U.S.-based importer of specialty olive oil, placed an order wit a...
Zorba Company Zorba Company, a U.S.-based importer of specialty olive oil, placed an order wit a foreign supplier for 500 cases of olive oil at a price of 100 crowns per case. Th total purchase price is 50,000 crowns. Relevant exchange rates are as follows: Spot Rate Forward Rate (to January 31, Year 2) Call Option Premium for January 31, Year 2 (strike price $1.00) Date December 1, Year 1..... December 31, Year 1.... January 31, Year 2...... $1.00 1.10...
Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French...
Vino Veritas Company, a U.S.-based importer of wines and
spirits, placed an order with a French supplier for 2,200 cases of
wine at a price of 260 euros per case. The total purchase price is
572,000 euros. Relevant exchange rates for the euro are as
follows:
Date
Spot Rate
Forward Rate
to October 31
Call Option Premium
for October 31
(strike price $1.65)
September 15
$
1.65
$
1.71
$
0.035
September 30
1.70
1.74
0.070
October 31
1.75
1.75...
On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for...
On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 270,000 FCUs with payment to be received on April 30, 2018. At the date of sale, Bernard entered into a six-month forward contract to sell 270,000 FCUs. The company properly designates the forward contract as a cash flow hedge of a foreign currency receivable. The following exchange rates apply: Date November 1, 2017 December 31, 2017 April 30, 2018 Spot Rate $ 0.38 0.36...
On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for...
On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 190,000 FCUs with payment to be received on April 30, 2018. At the date of sale, Bernard entered into a six-month forward contract to sell 190,000 FCUs. The company properly designates the forward contract as a cash flow hedge of a foreign currency receivable. The following exchange rates apply: Date Spot Rate Forward Rate (to April 30, 2018) November 1, 2017 $ 0.30 $...
Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French...
Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French supplier for 1,200 cases of wine at a price of 230 euros per case. The total purchase price is 276,000 euros. Relevant exchange rates for the euro are as follows: Date September 15 September 30 October 31 Spot Rate $1.15 1.20 1.25 Forward Rate to October 31 $1.21 1.24 1.25 Call Option Premium for October 31 (strike price $1.15) $ 0.050 0.085 0.100 Vino...
Spitz Company ordered merchandise from a foreign supplier on November 20 at a price of 101,000 forints when the spot rate was $0.51 per forint Delivery and payment were scheduled for December 20. On November 20, Spitz acquired a call option on 101.000 forints at a strike price of $0.51. paying a premium of $0.02 per forint. It designates the option as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is...
On June 1, Cairns Corporation purchased goods from a foreign supplier at a price of 1,400,000 francs and will make payment in three months on September 1. On June 1, Cairns acquired an option to purchase 1,400,000 francs in three months at a strike price of $0.779. Relevant exchange rates and option premiums for the franc are as follows: Call Option Premium for September 1 (strike price $0.779) $ 0.004 Spot Rate 0.779 0.784 Date June 1 June 30 September...
34. On June 1, Cairns Corporation purchased goods from a foreign supplier at a price of 1,000,000 francs and will make payment in three months on September 1. On June 1, Cairns acquired an option to purchase 1,000,000 francs in three months at a strike price of $0.852. Relevant exchange rates and option premiums for the franc are as follows: Date June 1 June 30 September 1 Spot Rate $0.852 0.858 0.872 Call Option Premium for September 1 (strike price...
Zorba Company Zorba Company, a U.S.-based importer of specialty olive oil, placed an order wit a foreign supplier for 500 cases of olive oil at a price of 100 crowns per case. Th total purchase price is 50,000 crowns. Relevant exchange rates are as follows: Spot Rate Forward Rate (to January 31, Year 2) Call Option Premium for January 31, Year 2 (strike price $1.00) Date December 1, Year 1..... December 31, Year 1.... January 31, Year 2...... $1.00 1.10...
Vino Veritas Company, a U.S.-based importer of wines and
spirits, placed an order with a French supplier for 2,200 cases of
wine at a price of 260 euros per case. The total purchase price is
572,000 euros. Relevant exchange rates for the euro are as
follows:
Date
Spot Rate
Forward Rate
to October 31
Call Option Premium
for October 31
(strike price $1.65)
September 15
$
1.65
$
1.71
$
0.035
September 30
1.70
1.74
0.070
October 31
1.75
1.75...
On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 270,000 FCUs with payment to be received on April 30, 2018. At the date of sale, Bernard entered into a six-month forward contract to sell 270,000 FCUs. The company properly designates the forward contract as a cash flow hedge of a foreign currency receivable. The following exchange rates apply: Date November 1, 2017 December 31, 2017 April 30, 2018 Spot Rate $ 0.38 0.36...
Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French supplier for 1,200 cases of wine at a price of 230 euros per case. The total purchase price is 276,000 euros. Relevant exchange rates for the euro are as follows: Date September 15 September 30 October 31 Spot Rate $1.15 1.20 1.25 Forward Rate to October 31 $1.21 1.24 1.25 Call Option Premium for October 31 (strike price $1.15) $ 0.050 0.085 0.100 Vino...
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