Two equal partners pitch Kevin O'Leary a $100,000 investment for 10%. Kevin counters with an offer of $250,000 for 30%. Jim Treliving jumps in and offers $200,000 for 15% Which deal is likely to happen? Why? How much will each co founder own if a deal gets done. (Show all calculations and pizza pie diagrams you use)

A year after that deal, they accept an additional offer of $2,000,000 for 50%. What % does each founder own after this deal. How much is that equity now worth? (Show all calculations and pizza pie diagrams you use)

"You are applying for a position where you will assist 401(k) plan participants in navigating their employer’s retirement plan so they can live comfortably in the future. The position is with the Vanguard investment management company. Please provide a detailed list of your expected job duties as well as potential questions that can be asked of you in the interview; to the best of your knowledge."

Suppose you are a manager of an activist hedge fund named “The Lone Wolf Financials”. On 1 June 2020, you want to assess the corporate governance of Woolworths Group (ASX ticker: WOW) and whether it is an attractive shareholder activism target. Specifically, your analysis should address the followings

Analyse WOW’s (Woolworths) corporate governance by answering the following questions:

How does WOW’s accounting and stock performance over the past 5 years compared to its peers

Does WOW’s CEO have sufficient performance-based pay?

How easy it is to replace WOW’s current board members?

You are a managing partner of a prestigious investment counseling firm that specializes in individual rather than institutional accounts. The firm has developed a national reputation for its ability to blend modern portfolio theory and traditional portfolio methods. You have written a number of articles on portfolio management and you are considered an authority on the subject of establishing investment policies and programs for individual clients tailored to their particular circumstances and needs.

Dr. and Mrs. A.J. Mason have been referred to your firm and to you in particular. At your first meeting on August 1, 2012, Dr. Mason explained that he is an electrical engineer and long-time professor at a local university. He is also an inventor and, after 30 years of teaching, the right to one of his patented inventions has just been acquired by a new electronics company, ACS, Inc.

In anticipation of the potential value of his invention, Dr. Mason has followed his accountant’s advice and established a private corporation, wholly owned by the Masons to hold the title to the patented invention.   It was this private corporation that sold the right to Dr. Mason’s invention to ACS, Inc. ACS, Inc. has agreed to pay $1 million in cash, payable at the closing on September 30, 2012, for the right to Dr. Mason’s invention. In addition, ACS, Inc. has agreed to pay royalties to Dr. Mason’s private corporation on its sales of systems that utilize the invention.

While all parties are optimistic about prospects for success, they are also mindful of the risks associated with any new firm, especially those exposed to the technological obsolescence of the electronics industry. The management of ACS, Inc. has indicated to Dr. Mason that he might expect royalties of as much as $100,000 in the first year of production and maximum royalties of as much as $500,000 annually thereafter.

During your counseling meeting Mrs. Mason expressed concern for the proper investment of the $1 million initial payment. She pointed out that Dr. Mason has invested all of their savings into his inventions. Thus, they will have only their Social Security retirement benefits and a small pension from the local university to provide for their retirement. Dr. Mason will be 65 at September 30, 2013. His salary from the local university is currently $55,000 per year and he does not expect this amount to change between now and his planned retirement on his 65th birthday. After retirement Dr. Mason expects to continue earning $10,000 - $25,000 annually from consulting and speaking engagements.   The expected Social Security benefits are expected to be $1,800 per month beginning in October, 2013 and the annual pension from the local university is expected to be $15,000 per year beginning at the same time.

Assuming the royalty payments from ACS, Inc. are equal to $100,000 in the first year and an average of $300,000 per year thereafter, the Masons are planning to help with the education of their six grandchildren. The grandchildren range in age from 8 to 12 years old. In addition, the Masons wish to establish a scholarship fund in the name of Dr. Mason at the local university that would provide $5,000 per year to one selected electrical engineering student. This scholarship should be self- sustaining with its own investments.

Both Dr. and Mrs. Mason have strongly indicated during the first appointment that they are conservative investors and want a minimum risk of any losses.

Requirements

You and your fellow partners are to present a proposal that specifically meets the retirement investment objectives of the Masons listed below. Your proposal should be from 4 – 6 pages double spaces, Times Roman 12 pt. In addition, your team should include a cover page listing each member of your team and a separate list of any references used in preparing the proposal. The proposal must follow APA rules in structure and presentation.

Dr. & Mrs. Mason’s Retirement Investment Objectives

*Provide $65,000 of withdrawals from the investment account each year. This amount will be in addition to the university pension and Social Security received each year.

*Minimize income tax.

*Include at least three types of investments.

*Provide for active management of the portfolio with an annual fee of 1% - 1 ½% of value in the investment portfolio.

*Provide an annual growth after all withdrawals and fees of 4% - 5%.

*Provide funding for the six grandchildren’s education that will total $40,000 each when they reach the age of 18.

*Provide for a continuing scholarship at the local university in the amount of $5,000 per year.

PharmaNiaga Bhd (PNB) is considering its intangible assets on how the matters below should be treated in its financial statements for the year ended 31 March 2020.

a). On 1 October 2019, PNB acquired Halia Bhd, a small company that specializes in pharmaceutical drug research and development on the usage of local source, halia hitam, for skin care products. The purchase consideration was by a share exchange and valued at RM35 million. The fair value of Halia Bhd’s net assets was RM15 million (excluding any items referred to below). Halia Bhd owns a patent for an established successful product that had a remaining life of 8 years. A firm specialist advisor, HebatBrand, has estimated the current value of this patent to be RM10 million, however the company is awaiting the outcome of clinical trials where the product has been tested to treat a different skin problem. If the trials are successful, the value of the product is estimated to be RM15 million. Also included in the company’s statement of financial position is RM2 million for medical research that has been conducted on behalf of a client.

b). PNB has developed and patented a new drug which has been approved for clinical use. The costs of developing the drug were RM12 million. Based on early assessments on its sales success, HebatBrand, has estimated its market value at RM20 million.

c).PNB’s manufacturing facilities have recently received a favorable inspection by government medical scientists. Consequently, the company has been granted an exclusive five-year license to manufacture and distribute a new vaccine. Although the license had no direct cost PNB, its directors feel its granting is a reflection of the company’s standing and have asked HebatBrand to value the license. Accordingly, they have placed a value of RM10 million on it.                                                                             

d) In the current accounting period, PNB has spent RM3 million sending its staff PNB’s on specialist training courses. Whilst these courses have been expensive, they have led to a marked improvement in production quality and staff now needs less supervision. This in turn led to an increase in revenue and cost reductions. The directors of PNB believe these benefits will continue at least three years and wish to treat the training costs as an asset.

e). In December 2019, PNB paid RM5 million for a television advertising campaign for its products that will run for 6 months from 1 January 2020 to 30 June 2020. The directors believe that increased sales as a result of the publicity will continue for two years from the start of the advertisements.

Required:

Explain with reasons and justifications how the directors of PNB should treat the above items in the financial statements for the year ended 31 March 2020.

Note: The values given by Hebatbrand can be taken as being reliable measurements. Ignore depreciation.

Pharoah Carecenters Inc. provides financing and capital to the healthcare industry, with a particular focus on nursing homes for the elderly. The following selected transactions relate to bonds acquired as an investment by Pharoah, whose fiscal year ends on December 31.

(Assume that all intervening transactions and adjustments have been properly recorded and that the number of bonds owned has not changed from December 31, 2020, to December 31, 2022.)

Journalize the listed transactions for the years 2020 and 2023. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

Part 2

Assume that the fair value of the bonds at December 31, 2020, was $1,254,000. These bonds are classified as available-for-sale securities. Prepare the adjusting entry to record these bonds at fair value. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Part 3

Based on your analysis in part (b), show the balance sheet presentation of the bonds and interest receivable at December 31, 2020. Assume the investments are considered long-term. Indicate where any unrealized gain or loss is reported in the financial statements. (Enter account name only and do not provide descriptive information.)

Questions: Question-1: Identify key international trade and finance principles in the case. Question-2: What are the financial instruments used to facilitate foreign trade? Question-3: What are the typical foreign trade transactions involved in the case?

Financing the foreign trade: the case of an India textile exporter Namita Rajput, Rohit Bhagat and Saachi Bhutani Bhagat Namita Rajput is Associate Professor at University of Delhi, New Delhi, India. Rohit Bhagat is Manager at Yes Bank Ltd, New Delhi, India. Saachi Bhutani Bhagat is Assistant Professor at University of Delhi, New Delhi, India. Introduction Mr Nitin Gupta, MD and CEO of Latest Fashions Pvt. Ltd., was sitting in his office on a mid-June morning thinking about the achievements his company had made since its inception. Nitin had just come back from the Annual General Meeting of Latest Fashions Pvt. Ltd. where he learned that the company had achieved a 30 per cent increase in sales compared to the previous financial year. Both the shareholders and employees were happy with the company’s performance, how the organisation had grown over the years and the company’s current goal of a 40 per cent increase in sales for the present year. But Nitin was worried about the working capital funds required to support the projected sales and was expecting large export orders from Europe and America that had to be supplied before Christmas. To deliver the orders on time, Nitin needed to procure raw material, hire labour and arrange for warehousing and shipping. “Where will these funds come from?” Nitin asked Mr Narayan Verma, his trusted financial advisor and the company’s Chartered Accountant. Textile industry in India The textile industry in India dates back to the Harappan Civilization. India is the second largest producer of textiles and garments in the world; in addition, the sector contributes about 11 per cent of the country’s export revenues [http://texmin.nic.in/annualrep/ar_12_ 13_english.pdf (accessed 3 August 2014)] and is the second largest provider of employment after agriculture in the country [www.ibef.org/industry/textiles.aspx (accessed 3 August 2014)]. The Working Group Report constituted by the Planning Commission that aimed to boost India’s manufacturing exports during the 12th Five Year Plan (2012-2017), estimates India’s exports of Textiles and Clothing to be US$64.11 billion by the end of March 2017. Indian textile products are exported to more than a hundred countries, and the USA and European Union are responsible for approximately two-thirds of India’s exports. Other countries that account for India’s exports include: Canada, UAE, Japan, Saudi Arabia, The Republic of Korea, Bangladesh and Turkey (Figure 1). Background Latest Fashions Pvt. Ltd. was set up 10 years previously by Nitin, an MBA graduate, with a modest promoter funding of INR1 million. Engaged in the business of exporting ready-made apparel and kidswear, exports contributed to the major part of the sales of the company. Over the years, as the company expanded and the requirement for funds to support the working capital needs of the company increased, Nitin managed to infuse his own money and profits into the company and now the company has reached a turnover of INR500 million. Disclaimer. This case is written solely for educational purposes and is not intended to represent successful or unsuccessful managerial decision making. The author/s may have disguised names; financial and other recognizable information to protect confidentiality. DOI 10.1108/EEMCS-08-2014-0201 VOL. 5 NO. 4 2015, pp. 1-11, © Emerald Group Publishing Limited, ISSN 2045-0621 EMERALD EMERGING MARKETS CASE STUDIES PAGE 1 Downloaded by Swinburne University of Technology At 06:42 27 March 2017 (PT) Mr Narayan Verma has long been a close confidante of Nitin and had often guided Nitin on financial matters since the business began. Knowing Nitin’s concerns, Narayan appraised him about the different sources of financing in international trade. Nitin and Narayan decided to meet banks and various agencies in the business of financing of foreign trade to discuss the merits and demerits of each source of finance and eventually decided on how to finance their growing working capital need. Meeting with the bank Narayan arranged a meeting with the Chief Manager of Honest Bank, Ms Priyanka, who had been in the trade finance division of the bank for more than a decade and had successfully completed certificate courses in Trade Finance from one of the premium institutes of India. Nitin: Good morning ma’am. How are you doing? Priyanka: I Am good. How about you? How was the performance of your company last year? Nitin: We did a turnover of INR50 crore last year which was a 30 per cent jump over the previous year. This year, we are expecting the sales to be up by a further 40 per cent. In fact, we have just received a few large orders from the USA and the EU. Figure 1 Trend of exports of textile and clothing from 2010-2011 to 2013-2014 0 50,000 100,000 150,000 200,000 250,000 2010-11 2011-12 2012-13 2013-14 Exports Year INR Crore USD Mn Source: Ministry of textiles, available at: http://texmin.nic.in/ sector/note_on_indian_textile_and_clothing_exports_intl_trade _section_Anx_I.pdf (accessed 24 January 2015) Figure 2 Process of letter of credit Importer LC Issuing Bank LC Advising Bank Exporter 1. Purchase Order 2. Approaches LC issuing Bank for Issuance 3. LC Issued and transm ed 4. LC advised 5. Shipment of Goods 6. LC, dra and shipping documents 7. LC, dra and shipping documents presented 8. Payment 9. Payment 10. Shipping documents forwarded 11. Payment PAGE 2 EMERALD EMERGING MARKETS CASE STUDIES VOL. 5 NO. 4 2015 Downloaded by Swinburne University of Technology At 06:42 27 March 2017 (PT) Priyanka: That is good to hear. Tell me, how can we assist you? Narayan: Over the years, the company has grown steadily and Nitin has been able to manage the growing fund requirement from his own funds and profits. Now that the company has reached a considerable size, we are looking to borrow funds from the bank to finance the international trade and enhance liquidity position of the company. Priyanka: We would be glad to get associated with your reputed organisation by financing your requirement. Nitin: What are the different ways in which you can extend loan to us? Priyanka: We can extend a line of credit to you to finance your export business. This could include availing pre-shipment finance against a confirmed order. You may utilise these funds for procurement of raw material, labour costs and packaging. Once the goods are shipped, we can extend post-shipment finance by purchasing the drafts and discounting the bill of exchange. Are there also exports that are backed by Letter of Credit (LCs)? Narayan: Our payment terms are for Letter of Credit (LCs), we receive LCs from buyers in the USA which are issued by top 10 banks of the world. Generally, the LC terms are for 180-day issuance from date of shipment. This leads to a temporary shortage of funds as we have already incurred the expenses for producing the goods and arranging to ship them; however, the payment from the importer becomes due on a later date. Priyanka: In such a case, on receipt and acceptance of an LC from a reputed bank, we can extend funds to you in anticipation of funds on the due date. Nitin: We are planning to import some machinery from Germany. Since the seller has a monopoly in the industry, they are insisting that we send them an advance before they ship the machinery to us. Priyanka: We can issue a Letter of Credit on your behalf in favour of the overseas supplier. Once the goods are shipped, the seller will present the documents including the Invoice, Insurance Policy, Packing List, Certificate of Origin, Bill of Exchange and Transport Documents for checking. Once we ascertain that the documents are as per the terms of the Letter of Credit, we will make payment to the overseas buyer. You can further avail buyer’s credit for making payment to the supplier. To understand the complete process of a Letter of Credit, please have a look at the below Figure 2. Narayan: What is the significance of these documents? Priyanka: The Commercial Invoice provides the details of goods shipped, along with the description of goods and their prices as agreed between the buyer and seller. An Insurance Policy is evidence of a contract of insurance and shows the full details of risks covered. A Packing List gives the details of the material packed. A Certificate of Origin is a proof that the goods originated in a particular country. A Bill of Exchange is a demand for payment issued by the exporter (drawer) to the importer (drawee). Narayan: Thanks, ma’am, for your guidance. Let me speak to the supplier and urge him to accept a Letter of Credit in place of an advance payment. Is there any other way in which you can support us? Priyanka: Yes, we can extend Bank Guarantees on your behalf as and when required. I would request you to share with me a copy of the latest audited balance sheet and a few details so that we can go ahead with the credit appraisal. This would involve assessing the balance sheet of your company. Nitin: Thanks, Priyanka for taking out time for meeting us. Let me discuss your proposal with our team and get back to you. Priyanka leaves Nitin: Narayan, would you recommend availing finance from the bank? VOL. 5 NO. 4 2015 EMERALD EMERGING MARKETS CASE STUDIES PAGE 3 Downloaded by Swinburne University of Technology At 06:42 27 March 2017 (PT) Narayan: I have scheduled a meeting with a factoring agency. Let us explore all the options and decide after that. Meeting with the factoring agency Nitin and Narayan decide to meet Mr Kapil, the head of Reliable Factors Ltd. Kapil has been working with Reliable Factors for more than 15 years. Kapil: Welcome Nitin and Narayan. I am obliged to meet you. I have heard many good things about your organisation at trade body meetings. Nitin: We are pleased to know this. We set up this company 10 years ago with a modest promoter funding of INR1 million, and last year we reached a turnover of INR500 million. Kapil: That is great to hear. Tell me, how I can be of assistance to you? Narayan: We are projecting a 40 per cent growth in turnover for which we are looking at a factoring agency which can fund our exports and streamline our cash flows. Kapil: We have been in the business of factoring for the past 15 years and have a sizeable portfolio in the textile sector. You can sell the export receivables to us in exchange of cash. Nitin: We would like to understand the process involved in the factoring of our exports. Kapil: We will sign a written agreement with you. Whenever you receive an order from the buyer, please let us know and we will do an examination of the creditworthiness of the buyer through our correspondent import factor based in the country of the buyer. Once this is done, you can ship the goods to the buyer. You can assign the invoices in our favour and we will provide a pre-agreed amount of cash in return. We will follow-up with the buyer for payment and the buyer will make the full payment to us. Narayan: What if the payment doesn’t come from the buyer on the due date? Kapil: There are two types of factoring: factoring with recourse, wherein, we will recover funds from you if the overseas buyer defaults and factoring without recourse, wherein, we will assume the payment risk of the overseas buyer and hence it is costlier than the first option. Nitin: What would be the charges for your services? Kapil: We usually charge interest in addition to the factoring commission which ranges between 1 and 3 per cent of the total transaction value depending on the credit standing of the buyer and buyer’s country. Narayan: Is there any additional service that you can offer to us? Kapil: In addition to providing financing, we can also perform credit investigations, guarantee commercial and political risks, assume collection responsibilities and offer marketing assistance. We can also look at doing forfaiting in case of medium- to long-term receivables. Ntitin: How is forfaiting different from factoring? Kapil: While factoring is used to finance short-term receivables ranging from 90 to 180 days, forfaiting is more relevant to capital goods and is used to finance medium- to long-term receivables, i.e. from 180 days up to 7 years. The financial instruments in forfaiting are usually time draft, bills of exchange and promissory notes. Forfaiting is always without recourse. Narayan: How does forfaiting work? Kapil: Forfaiting involves four parties – the exporter, the forfeiter, the importer and a bank from the importing country. Once the exporter manufactures the goods and sells them to the importer, the importer accepts Bills of Exchange drawn in its favour or issues promissory notes to the exporter. These financial instruments are guaranteed by a bank in PAGE 4 EMERALD EMERGING MARKETS CASE STUDIES VOL. 5 NO. 4 2015 Downloaded by Swinburne University of Technology At 06:42 27 March 2017 (PT) the importer’s country usually on an irrevocable basis. On receipt of these financial instruments, the forfeiter extends funds to the exporter. Nitin: Is there any difference in the pricing of factoring and forfaiting? Kapil: Since forfaiting is always without recourse, it is more expensive than factoring. In the case of forfaiting, a commitment fees is taken by us in addition to the discount fees for our commitment to execute a specific forfaiting transaction at a firm discount rate within a specified time. It varies between 0.5 to 1.5 per cent per annum of the unutilized amount to be forfeited and is charged for the period between the date the commitment is given and the date the discounting takes place or until the validity of the contract, whichever is earlier. Nitin: It was nice meeting you. We will share with you a list of the buyers, countrywise, that we deal with. Please let us know your tentative pricing for both factoring and forfaiting. Kapil leaves Nitin: What do you think about the proposal for factoring and forfaiting? Narayan: Let us also visit the Web site of Exim Bank, India, and Export Credit Guarantee Corporation of India Ltd. (ECGC). Export import Bank of India Exim Bank is the premier export finance institution of India. It was set up in 1982 under the Export Import Bank of India Act 1981, and the government’s objective behind it was to enhance exports from India and integrate the country’s foreign trade and investment with the overall economic growth. In 2014, the bank had a loan portfolio of INR745,983 million [www.eximbankindia.in/ (accessed 10 August 2014)]. The bank plays an important part in India’s trade by financing, promoting and facilitating India’s foreign trade and is the principal financial institution in the country for coordinating the working of institutions engaged in financing exports and imports. The Exim Bank has taken the following initiatives to promote India’s foreign trade: Project exports: Exim Bank takes funded (Pre-Shipment Credit, Post-Shipment Credit, etc.) and non-funded exposure (Guarantee) for supporting turnkey projects, civil construction contracts, technical and consultancy service contracts, as well as supplies. Overseas investment finance program: The bank encourages Indian companies to invest abroad by providing facilities for Indian investments and overseas acquisitions. These facilities include loans to Indian Companies for investing in overseas ventures, extending letters of credit and guarantees to facilitate local borrowings by the overseas ventures. Lines of credit: Exim Bank extends Lines of Credit (LOC) to foreign governments or their nominated agencies and overseas financial institutions enabling them to finance imports of goods and services from India on deferred credit terms and thus promoting exports from India to target countries. Buyer’s credit: Overseas buyers can avail this facility for import of goods and services from India on deferred payment terms. This facility enables overseas buyers to avail medium- to long-term financing at a low cost compared to high cost of funding in the country of the importer. Marketing advisory services: Exim Bank supports Indian companies in their marketing initiatives on a success fees basis. The bank assists in identification of overseas opportunities for finding new markets, setting up plants and acquisition of overseas companies. VOL. 5 NO. 4 2015 EMERALD EMERGING MARKETS CASE STUDIES PAGE 5 Downloaded by Swinburne University of Technology At 06:42 27 March 2017 (PT) Corporate banking: The bank offers Term Loans in Indian Rupees/Foreign Currency to Indian Exporters, Export-Oriented Units (EOUs), Micro Small and Medium Enterprises (MSMEs) for financing projects, R&D, Expansion, working capital and modernisation. Grassroots initiatives and development (GRID) programme: Under this programme, EXIM Bank extends financial support to create export capability in grassroots enterprises and promote grassroots initiatives and technologies having export potential. Additionally, they also discussed getting the foreign credit insurance offered by the Export Credit Guarantee Corporation of India Ltd. backed by the government of the country to cover all kinds of risks associated with export trading, e.g. loss of money on account of foreign buyer becoming bankrupt or sudden import or exchange restrictions resulting in stopping of payments [www.ecgcindia.in/en/pages/ecgcaphome.aspx (accessed 10 August 2014)]. Currency risk While deciding on the strategy for the coming year, Nitin is also faced with the challenge on how to mitigate the currency risk. In the past, there have been instances where Nitin has quoted the price at the prevalent currency rate and by the time the export proceeds were realised, he received a lesser value for his goods. Nitin extracted the data of Foreign Exchange Rates for the past year and, on analysis, found that there had been an average 5-7 per cent fluctuation in the foreign currency rates against the Indian Rupee on a daily basis. Nitin was unable to decide whether to hedge the foreign currency or not (Figure 3). Narayan advised Nitin that there were two ways of hedging the currency risk: 1. A forward contract between a bank and a customer calls for a delivery, at a fixed future date, of a specified amount of one currency against another currency at an exchange rate fixed at a time the contract is entered into. 2. An option is a financial instrument that gives the holder the right but not the obligation to sell or buy another financial instrument at a set price and expiration date (Shapiro, 2006). Equipped with the knowledge of different ways of financing the foreign trade and hedging the currency risk, Nitin and Narayan decided to hold a meeting next day with the management team to discuss their views on how to meet their growing requirement of capital and boost the liquidity position of the company. They needed to make a decision Figure 3 Foreign currency rates with respect to Indian rupee from 1 April 2014 to 31 March 2014 0 20 40 60 80 100 120 02-04-13 02-05-13 02-06-13 02-07-13 02-08-13 02-09-13 02-10-13 02-11-13 02-12-13 02-01-14 02-02-14 02-03-14 FX rate Date Foreign Exchange Rates for FY 14 USD GBP EURO Source: www.rbi.org.in PAGE 6 EMERALD EMERGING MARKETS CASE STUDIES VOL. 5 NO. 4 2015 Downloaded by Swinburne University of Technology At 06:42 27 March 2017 (PT) immediately as the peak season was approaching and they needed funds immediately to start working on the orders they had received. Narayan summarised the following list of products discussed during the different meetings for the ease of decision-making: 1. Bank: Pre-shipment finance; Post-Shipment Finance; Discounting against Letter of Credit; Letter of Credit; Buyer’s Credit; and Bank Guarantee. 2. Factoring Agency: Factoring with recourse; Factoring without recourse; Credit investigations; Guarantee commercial and political risks; Collection responsibilities; Marketing assistance; and Forfaiting. 3. Export Import Bank of India: Project Exports; Overseas Investment Finance Program; Lines of Credit (LOC); Buyer’s Credit; Marketing Advisory Services; Corporate Banking; and Grassroots Initiatives & Development (GRID) programme. 4. Export Credit Guarantee Corporation of India: Foreign credit insurance. Reference Shapiro.

North Shore Equipment (NSE), a U.S. company, consistently purchases steel from a supplier in Japan with the invoice price denominated in Japanese yens. During the past year, NSE experienced substantial losses from foreign currency exchanges due to fluctuations in the exchange rate of the U.S. dollar to the Japanese yen. Therefore, Hector Hodgdon, NSE's CEO, has asked you to examine whether derivative financial instruments (e.g., foreign currency forward contracts and foreign currency options) to hedge the company's exposure to foreign exchange risk should be used going forward.

Required

Write a memo to CEO Hodgdon discussing any advantages and/or disadvantages of using forward contracts and options as a hedge against foreign exchange risk. Please be sure to recommend which type of hedging instrument you believe NSE should use. Make sure to justify your recommendation. Please make sure to properly cite any resources you use to answer this question.

Brooke, a single taxpayer, works for Company A for all of 2020, earning a salary of $50,000.

b. Assume Brooke works for Company A for half of 2020, earning $50,000 in salary, and she works for Company B for the second half of 2020, earning $90,000 in salary. What is Brooke’s FICA tax obligation for the year? (Round your intermediate calculations to the nearest whole dollar amount.)

FICA Tax Obligation ______________________