YOU are the financial officer at an Austrian company that wants to BUY USD 1.000.000 of solar equipment from a U.S. producer. You need to pay for the equipment in 90 days.

You have the following information available:

Spot rate $1.125 / €  90-Day forward rate $1.09 (actual spot rate expected based on historical distribution: $1.05 - $1.12)

Interest rates: US $ 4% EUR 2%

FX options available:

Contract size $125.000

CALLS : June (3 months ahead), strike price $1.10/€, Premium € 2000 per contract

PUTS : June (3 months ahead), strike price $1.00/€

Premium €1000 per contract

Futures contracts available:

Contract size $250.000

June contract, FX rate $1.11

Margin to maintain 10%

Describe your foreign exchange exposure

Describe how you would use the following instruments to hedge, i.e. how would each instrument work? (more important to describe than to calculate): Forward Contract , Options Contract

Would you recommend that the company hedge this transaction? Which instrument (any of the instruments, not just the two above) would you recommend?

our company is considering a machine that will cost $ 6,582 at Time 0 and which can be sold after 3 years for $ 231 . To operate the machine, $ 418 must be invested at Time 0 in inventories; these funds will be recovered when the machine is retired at the end of Year 3. The machine will produce sales revenues of $ 981 /year for 3 years; variable operating costs (excluding depreciation) will be 56 percent of sales. Operating cash inflows will begin 1 year from today (at Time 1). The machine is in the 3-year MACRS class. The MACRS class has depreciation of 33% in year 1, 45% in year 2, 15% in year 3, and 7% in year 4. The company has a 30 percent tax rate, enough taxable income from other assets to enable it to get a tax refund from this project if the project's income is negative, and a 10 percent cost of capital. Inflation is zero. What are the terminal cash flows associated with ending this project?

Note, I want only the Year 3 terminal cash flows, not the year 3 operating cash flows. Show your answer to the nearest $.01 Do not use the $ symbol in your answer.

pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.4%. The probability distributions of the risky funds are:

The correlation between the fund returns is 0.0684.

What is the Sharpe ratio of the best feasible CAL? (Do not round intermediate calculations. Round your answer to 4 decimal places.)

Due to Coronavirus describe the financial impact of this Pandemic on the health care setting and how the Healths Care administrator will manage the budget with this new inquired.

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ROA (Return on assets) is a rate that measures the net income compared to the total assets. In other words, it shows how much the company is generating for each dollar invested. It is helpful to compare the results of the companies in the market. A company can be very lucrative, but not efficient. It can demand too much investment to obtain that profit.

The ROE (Return on equity) is very similar to ROA, but it includes the debt of the company. It is calculated by dividing the Net Income by the Stakeholder's equity. Since the stakeholder's equity is the total assets minus the debt of the company, this index shows the return compared to the own capital of the company

Stocks A and B have the following historical returns:

(a) Calculate the average rate of return and standard deviation of returns (as percents) for each stock during the 5-year period. (Round your standard deviations to two decimal places.)

stock A average rate of return %

standard deviation %

stock B average rate of return %

standard deviation %

(b) Assume that someone held a portfolio consisting of 50% of stock A and 50% of stock B and that the average annual realized returns and past volatility of each stock are unbiased estimators of their expected returns and future volatility. What is the portfolio's expected return and the volatility of next year's returns (as percents)? The correlation between the returns of the two stock is 90.83%. (Round your answers to two decimal places.)

expected return %

volatility %

At an output level of 18,500 units, you have calculated that the degree of operating leverage is 2.10. The operating cash flow is $44,000 in this case. Ignore the effect of taxes.

a. What are fixed costs? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

b. What will the operating cash flow be if output rises to 19,500 units? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

c. What will the operating cash flow be if output falls to 17,500 units? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

You have $5,995.14 in a brokerage account, and you plan to deposit an additional $6,000 at the end of every future year until your account totals $280,000. You expect to earn 13% annually on the account. How many years will it take to reach your goal? Round your answer to two decimal places at the end of the calculations.

___ years

3. You would like to retire at the end of 40 years with an annual pension of $1 million per year for 30 years.

a) How much would you have to deposit every year for the next 40 years to meet your goal? Assume you invest in the stock market at an average return of 12 percent per year (for the entire 70 years).

b) Suppose your annual deposits calculated in part (a) actually earned only 6 percent per year for 40 years, how much would you be able to withdraw every year for 30 years following retirement? Assume the 6 percent return is earned over the entire 70 years.

A binomial tree with one-month time steps is used to value an index option. The interest rate is 3% per annum and the dividend yield is 1% per annum. The volatility of the index is 16%. What is the probability of an up movement?

xkl plans a new project that will generate 187000 of continious cash flow each year for 8 years and additionally 108000 at the end of the project . if the continiously compounded rate of interest is 4 % estimate the pressent value of the cash flows

answer is 1,358,677.35

but details on how i get there please no excel

Today’s price of Delta is $150 per share. You are neither bullish nor bearish about Delta, but you believe that the share price will not move by a lot in the near future. To implement your view, you decide to sell a straddle with one month until maturity. An option dealer provides you quotes on one-month Delta options. For a call option with a strike of $150, the dealer quotes you a price of $4.32. For a put option with a strike of $150, the dealer quotes you a price of $4.32. The c.c. risk-free rate is zero. What is the profit to the short straddle if Delta trades at $200 per share in one month?

There are 2 breakevens, what is the high and what is the low? (There should be two answers, one for high and one for low)

2. Mansfield Company makes wiring harnesses for the automotive industry. Its standard costs for each harness are 2 direct labor hours per unit at $23 of labor cost per hour, and one pound of plastic harness material at $1.25 per pound. Actual manufacturing data for the period are as follows: Number of Units Manufactured 40,000 Number of Direct Labor Hours Used 79,400 Actual Direct Labor Cost $1,746,800 Number of Pounds of Direct Material Used 40,800 Number of Pounds of Direct Material Purchased 41,000 Actual Direct Material Cost $51,000 Calculate Direct Labor Rate Variance __________ Calculate Direct Labor Quantity Variance __________ Calculate Direct Material Price Variance __________ Calculate Direct Material Quantity Variance __________

With the growing popularity of casual surf print clothing, two recent MBA graduates decided to broaden this casual surf concept to encompass a “surf lifestyle for the home.” With limited capital, they decided to focus on surf print table and floor lamps to accent people’s homes. They projected unit sales of these lamps to be 8,100 in the first year, with growth of 5 percent each year for the following four years (Years 2 through 5). Production of these lamps will require $46,000 in networking capital to start. Total fixed costs are $106,000 per year, variable production costs are $12 per unit, and the units are priced at $40 each. The equipment needed to begin production will cost $186,000. The equipment will be depreciated using the straight-line method over a five-year life and is not expected to have a salvage value. The effective tax rate is 40 percent, and the required rate of return is 20 percent. What is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)