Question
In: Finance
Costco is an American wholesale corporation which has expanded its business internationally. a) Costco currently needs...
Costco is an American wholesale corporation which has expanded
its business internationally. a) Costco currently needs to buy
Australian dollars to be used to open another store in Melbourne.
The quote advertised by a local foreign exchange dealer in New York
is AUD 1= USD 0.6690-0.6700 1) What is the commodity currency in
the advertised quote? Is it a direct quotation or an indirect
quotation? [1 mark] ii) What is the rate at which Costco can
exchange US dollars into Australian dollars? Explain why? [2 marks]
iii) If Costco has USD $10,000,000, how much AUD can it be
exchanged for given your answer to part a) 11)? [1 mark] b) At the
end of each financial year Costco needs to convert its profit
earned in Australia into USD. i) What are the up-side and down-side
foreign exchange risks Costco may have to face? [2 marks]
ii) If the Australian dollar depreciates by 20 pips in both the bid
and offer rate at the end of this financial year, what is the rate
at which Costco exchanges Australian dollars into US dollars?
Explain why (In your discussion you need to identify the new quote
after the depreciation of AUD against USD) [3 marks] iii) If Costco
has AUD $500,000, how much US dollars can it be exchanged for given
your answer to part b) ii)? [1 mark
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Analysis and Interpretation of Profitability Balance sheets and income statements for Costco Wholesale Corporation follow. Costco...
Analysis and Interpretation of
Profitability
Balance sheets and income statements for Costco Wholesale
Corporation follow.
Costco Wholesale Corporation
Consolidated Statements of Earnings
For Fiscal Years Ended ($ millions)
September 2, 2018
Total revenue
$141,576
Operating expenses
Merchandise costs
123,152
Selling, general and administrative
13,876
Preopening expenses
68
Operating Income
4,480
Other income (expense)
Interest expense
159
Interest income and other, net
(121)
Income before income taxes
4,442
Provision for income taxes
1,263
Net income including noncontrolling interests
3,179
Net income...
Both Costco and B.J.'s are called wholesale clubs as a type of business. But are they?...
Both Costco and B.J.'s are called wholesale clubs as a type of
business. But are they? Are they really retailers or wholesalers?
Explain your answer by using an item they sell to both retailers
and wholesalers.
Analysis and Interpretation of Liquidity and Solvency Balance sheets and income statements for Costco Wholesale Corporation...
Analysis and Interpretation of Liquidity and Solvency
Balance sheets and income statements for Costco Wholesale
Corporation follow.
Costco Wholesale
Corporation
Consolidated Statements
of Earnings
For Fiscal Years Ended ($
millions)
August 28, 2016
August 30, 2015
August 31, 2014
Revenue
Net Sales
$116,073
$113,666
$110,212
Membership fees
2,646
2,533
2,428
Total revenue
118,719
116,199
112,640
Operating expenses
Merchandise costs
102,901
101,065
98,458
Selling, general and administrative
12,068
11,445
10,899
Preopening expenses
78
65
63
Operating Income
3,672
3,624
3,220
Other...
Need a corporation that operates internationally and to evaluate its international business-level strategy, as well as,...
Need a corporation that operates internationally and to evaluate
its international business-level strategy, as well as, it’s
international corporate-level strategy and make recommendations for
improvement.
Costco Wholesale Corporation operates more than 600 warehouse stores in the United States and abroad. The...
Costco Wholesale Corporation operates more than
600 warehouse stores in the United States and abroad. The following
items were in a slightly simplified version of the company’s
statement of cash flows for the fiscal year ending August 28,2011
(in millions):
Increase in merchandise inventories
$ 642
Net income
1,542
Depreciation and amortization
855
Other noncash expenses
269
Increase in payables
804
Increase in other operating liabilities, net
451
Increase in receivables
81
The company’s income statement showed (in millions):...
What has been the public’s opinion of the business ethics of Costco? Which of the three...
What has been the public’s opinion of the business ethics of
Costco?
Which of the three models of management ethics – moral, immoral
and amoral do you think Costco has followed? Why?
Costco Wholesale Corporation owns and operates membership warehouses in the United States, Canada, United Kingdom, Mexico,...
Costco Wholesale Corporation owns and operates membership
warehouses in the United States, Canada, United Kingdom, Mexico,
Japan, Australia, and Spain. Costco also engages in retail
operations through majority owned subsidiaries in Korea and Taiwan.
The outside equity interests (not owned by Costco) in the Korean
and Taiwanese subsidiaries are presented collectively as
noncontrolling interests in Costco’s consolidated financial
statements.
Access Costco’s 2015 10-K annual report and answer the
following:
1. How does Costco present the noncontrolling interest in the
following...
Costco Wholesale Corporation Consolidated Statements of Earnings For Fiscal Years Ended ($ millions) August 28, 2016...
Costco Wholesale Corporation
Consolidated Statements of Earnings
For Fiscal Years Ended ($ millions)
August 28, 2016
August 30, 2015
August 31, 2014
Revenue
Net Sales
$116,073
$113,666
$110,212
Membership fees
2,646
2,533
2,428
Total revenue
118,719
116,199
112,640
Operating expenses
Merchandise costs
102,901
101,065
98,458
Selling, general and administrative
12,068
11,445
10,899
Preopening expenses
78
65
63
Operating Income
3,672
3,624
3,220
Other income (expense)
Interest expense
(133)
(124)
(113)
Interest income and other, net
80
104
90
Income before...
Costco Wholesale Corporation Consolidated Statements of Earnings For Fiscal Years Ended ($ millions) August 28, 2016...
Costco Wholesale Corporation
Consolidated Statements of Earnings
For Fiscal Years Ended ($ millions)
August 28, 2016
August 30, 2015
August 31, 2014
Revenue
Net Sales
$116,073
$113,666
$110,212
Membership fees
2,646
2,533
2,428
Total revenue
118,719
116,199
112,640
Operating expenses
Merchandise costs
102,901
101,065
98,458
Selling, general and administrative
12,068
11,445
10,899
Preopening expenses
78
65
63
Operating Income
3,672
3,624
3,220
Other income (expense)
Interest expense
(133)
(124)
(113)
Interest income and other, net
80
104
90
Income before...
Costco Wholesale Corporation Consolidated Statements of Earnings For Fiscal Years Ended ($ millions) August 28, 2016...
Costco Wholesale
Corporation
Consolidated Statements
of Earnings
For Fiscal Years Ended ($
millions)
August 28, 2016
August 30, 2015
August 31, 2014
Revenue
Net Sales
$116,073
$113,666
$110,212
Membership fees
2,646
2,533
2,428
Total revenue
118,719
116,199
112,640
Operating expenses
Merchandise costs
102,901
101,065
98,458
Selling, general and administrative
12,068
11,445
10,899
Preopening expenses
78
65
63
Operating Income
3,672
3,624
3,220
Other income (expense)
Interest expense
(133)
(124)
(113)
Interest income and other, net
80
104
90
Income before...
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