Bobcat Company, U.S.-based manufacturer of industrial equipment, just purchased a Korean company that produces plastic nuts and bolts for heavy equipment. The purchase price was Won7,500 million. Won1,000 million has already been paid, and the remaining Won6,500 million is due in six months. The current spot rate is Won950/$, and the 6-month forward rate is Won975/$. The six-month Korean won interest rate is 8% per annum, the six-month US dollar rate is 6% per annum. Bobcat can invest at these interest rates, or borrow at 2% per annum above those rates. A six-month call option on won with a 1,000/$ strike rate has a 2.0% premium, while the six-month put option at the same strike rate has a 1.4% premium. Bobcat can invest at the rates given above, or borrow at 2% per annum above those rates. Bobcat's weighted average cost of capital is 12%. Compare alternate ways that Bobcat might deal with its foreign exchange exposure. What do you recommend and why? Assumptions Values Purchase price of Korean manufacturer, in Korean won 7,500,000,000 Less initial payment, in Korean won (1,000,000,000) Net settlement needed, in Korean won, in six months 6,500,000,000 Current spot rate (Won/$) 950 Six month forward rate (Won/$) 975 Bobcat's cost of capital (WACC) 12.00% Options on Korean won: Call Option Put Option Strike price, won 1,000.00 1,000.00 Option premium (percent) 2.000% 1.400% United States Korea Six-month investment (not borrowing) interest rate (per annum) 6.000% 8.000% Borrowing premium of 2.000% 2.000% 2.000% Six-month borrowing rate (per annum) 8.000% 10.000% Refer to Instruction 10.1. If Bobcat decides to perform a money market (balance sheet) hedge, how many US dollars will in need at settlement in 6-months? Group of answer choices

$6,587,947.

Won6,578,947.

Won6,973,684.

$6,973,684.

Opening UCC balances

Class 1 $330,000

Class 8 $56,000

Class 10.1 $21,000

Class 13 $45,000

Class 50 $260,000

The company purchased furniture on August 1, 2020 for $44,914.

On the same date, the company sold furniture, which had been originally purchased for $22,031, for $15,364.

Calculate the maximum impact on business income for the year from furniture and other miscellaneous tangible capital assets.

A company issued $1000 par value 20- year zero coupon bonds on jan.1,2020. The purpose was to raise $100 million of funding for future development. Yield to Maturity on this bond is 3.5%

1. Calculate the total cash amount that the company needed to have available on the maturity date of jan.1,2040 to pay all the bondholders?

2. Use the IRS amortization rule to calculate the company's total interest expense for on the bonds for 2020/

Pro Forma balance sheet- Peabody & Peabody has 2019 sales of 10.4 milion. it wishes to analyze expected performance and financing needs for 2021- 2 years ahead. Given the following information respond to parts a. and b.

1. the percent of sales for items that vary directly with sales are as follows: Accounts receivable 12.2%, inventory 18.2%, accounts payable, 13.6% , Net Profit margin 3.3%

2. Marketable securties and other current liabilites are expected to remain unchanged.

3. a minimum cash balance of $483,000 is desired.

4. A new machins costing $648,000 will be acquired in 2020 and equipement costing $853,00 wil be purchased in 2021. Total deprication in 2020 is forecast as $286,00 and in 2021 $392,000 of depreciation will be taken.

5. Accurals are expected to rise $502,000 by the end of 2021.

6. No sales or retirement of long-term debt is expected

7. No sale or repurchase of common stock is expected

8. the dividend payout of 50% of net profits is expected to continue.

9. Sales are expected to be $11.5 million in 2020 and $11.3 million in 2021.

10. The december 31, 2019 balance sheet is here.

a. Prepare a pro forma balance sheet dated December​ 31,2021

b. Discuss the financing changes suggested by the statement prepared in part (a​).

1. Which of the following statements is (are) correct?
(x) Charles and Beatrice are American residents. Charles buys stock of a corporation in Germany. Beatrice opens a coffee shop in Germany. Both actions decrease Germany’s net capital outflow.
(y) Theodore a U.S. citizen, buys stock in a Japanese car producing company. This purchase is an example of saving for Theodore and foreign portfolio investment for the United States.
(z) A U.S. firm buys bonds issued by a car producer in Italy. This purchase of bonds is an example of U.S. foreign portfolio investment. By itself it is an increase in U.S. holdings of foreign bonds and decreases U.S. net capital outflow.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (y) only

4. Which of the following statements is (are) correct?
(x) During some year a country had exports of $60 billion, imports of $70 billion, and domestic investment of $90 billion. Its saving during the year was $100 billion.
(y) If a country has 50 billion euros of imports, 30 billion euros of exports, and sells 40 billion euros of assets to foreigners, then domestic residents purchased 20 billion euros of foreign assets.
(z) The country of Greatland has net capital outflow of $100,000, government purchases of $500,000 and consumption of $2,000,000. If its domestic investment is $200,000, then its GDP is $2,800,000.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (y) only

5. , which of the following statements is (are) correct?
(x) From 1960 to about 1975 in the United States, net capital outflow was small and sometimes negative and sometimes positive.
(y) Most of the change from 1991 to 2000 in U.S. net capital outflow as a percent of GDP was due to a decrease in U.S. investment
(z) In the U.S. from 2000 to 2006, net capital outflow as a percent of GDP became a larger negative number because of a large trade deficit and a large net capital inflow.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (z) only

Mattel is a​ U.S.-based company whose sales are roughly​ two-thirds in dollars​ (Asia and the​ Americas) and​ one-third in euros​ (Europe). In​ September, Mattel delivers a large shipment of toys​ (primarily Barbies and Hot​ Wheels) to a major distributor in Antwerp. The​ receivable, €36 ​million, is due in 90​ days, standard terms for the toy industry in Europe.​ Mattel's treasury team has collected the following currency and market quotes in the table below. The​ company's foreign exchange advisers believe the euro will be at about ​$1.4213​/€ in 90 days.​ Mattel's management does not use currency options in currency risk management activities. Assume a​ 360-day financial year.

a. How much in U.S. dollars will Mattel receive in 90 days without a hedge if the expected spot rate in 90 days is the same as the current spot rate of ​$1.4156​/€​?

b. How much in U.S. dollars will Mattel receive in 90 days without a hedge if the expected spot rate in 90 days is the same as the Credit Suisse forward rate of ​$1.4185​/€​?

c. How much in U.S. dollars will Mattel receive in 90 days without a hedge if the expected spot rate in 90 days is the same as the Barclays forward rate of $ 1.4181/€ ​?

d. How much in U.S. dollars will Mattel receive in 90 days without a hedge if the expected spot rate in 90 days is the same as the expected spot rate of ​$1.4213​/€​?

e. How much in U.S. dollars will Mattel receive in 90 days if the accounts receivable is covered by the Credit Suisse​ 90-day forward​ contract?

f. How much in U.S. dollars will Mattel receive in 90 days if the accounts receivable is covered by the Barclays​ 90-day forward​ contract?

g. How much in U.S. dollars will Mattel receive in 90 days with a money market​ hedge?

In a random sample of 1008 U.S. adults taken 10 years ago, 515 think that the U.S. government is doing too little to protect the environment. In a recent random sample of 1022 U.S. adults, 480 think that the U.S. government is doing too little to protect the environment. At ? = 0.05, test the claim that the proportion of U.S. adults who think that the U.S. government is doing too little to protect the environment has changed?

Create a 95% confidence interval to estimate the difference between the proportion of U.S. adults who think the U.S. government is doing too little (you don’t need to interpret the interval, just list it to 3 decimal places)

Does the confidence interval verify the results from the hypothesis test? Why?

For the scenarios discussed below, use supply and demand curves and a graph to analyze what will happen to both price and quantity in equilibrium given the information available below. Graphs MUST be half a page each. When it is impossible to pin down the direction of the effect, discuss what is more likely in your opinion and why. Make sure to differentiate between movements of curves and movements on curves. For example, you could say something like this: “the supply curve moves to the right. As a result, price decreases, and quantity supplied (and demanded) in equilibrium increases”

1. You are the CEO of American Airlines. Your market research people inform you that Southwest is about to enter the Northeastern US market, where it does not currently operate. Analyze the market for flights in the Northeast.
2. You are the CEO of Philip Morris. The FDA announces that cigarettes are unhealthy. Analyze the market for cigarettes. What could you do to increase profitability given the news?
3. You are the CEO of Toyota. Your engineers have just developed a new robot that reduced the costs involved with manufacturing a new car by 10%. The robot is not available to your competitors. Analyze the car sales market. Remember to differentiate between your supply and supply by other firms and show how each is affected as well as what happened to total quantity, price, and your market share. Hint – remember that market supply is the sum of your supply and your competitors’ supply.
4. You are the CEO of Coca-cola. The FDA introduces a $2 per meal tax on fast-food (but not on drinks). Analyze the market for your products. It is the fast food sellers who are obliged to pay the tax to the state.
5. You are the CEO of Coca-cola. The price of sugar increases. Analyze the results in both the regular Coke and Diet-Coke markets.