Flesch Corporation produces and sells two products. In the most recent month, Product C90B had sales of $19,950 and variable expenses of $5,985. Product Y45E had sales of $26,190 and variable expenses of $10,476. The fixed expenses of the entire company were $17,000. If the sales mix were to shift toward Product C90B with total dollar sales remaining constant, the overall break-even point for the entire company:

Multiple Choice

• would increase.

• would decrease.

• could increase or decrease.

• would not change.

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Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

The total contribution margin for the month under variable costing is:

Multiple Choice

• $43,120

• $45,620

• $109,820

• $125,970

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WV Construction has two divisions: Remodeling and New Home Construction. Each division has an on-site supervisor who is paid a salary of $86,000 annually and one salaried estimator who is paid $48,000 annually. The corporate office has two office administrative assistants who are paid salaries of $52,000 and $38,000 annually. The president's salary is $156,000. How much of these salaries are common fixed expenses?

Multiple Choice

• $246,000

• $156,000

• $90,000

• $318,000

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Younie Corporation has two divisions: the South Division and the West Division. The corporation's net operating income is $89,000. The South Division's divisional segment margin is $39,500 and the West Division's divisional segment margin is $171,900. What is the amount of the common fixed expense not traceable to the individual divisions?

Multiple Choice

• $122,400

• $128,500

• $260,900

• $211,400

Garcia Company has employed a bookkeeper who is inexperienced. On December 30, after reviewing the records for the year, you discover the following error. On August 1, Garcia Company received $600 on account (from a customer for services previously performed and billed on July 15). The bookkeeper recorded this by debiting Cash and crediting Service Revenue. Required: Prepare a correcting entry on December 30. Make sure to enter the day for each separate transaction.

You need to order US $100,000 worth of reams of paper from China to complete an order from an important commercial customer in 30 days. The current rate of exchange is USD/CNY = 6.5766.

• Ignoring other transaction expenses associated with the order, how many Yuan would you need to pay the Chinese supplier?
• Define the meaning of foreign exchange. Assuming that you have the choice to pay immediately or in 30 days, define, describe, and provide examples of how you may use each of the following to complete the transaction:
  • Definition and use of foreign currency derivatives
  • Spot, forward, and futures currency contracts
  • Bid/ask spreads
  • Definition and use of currency options

Purchase of Health Insurance

1) As one looks at historical data in the US from 1950 forward, describe the medical services that have been most commonly covered by health insurance (for the most people, and earliest in history), and those that have been covered less commonly (for fewer people, and later in history).

2) Discuss two economic aspects of the demand for these various services that will help understand the historic trends you described in part 1).

3) Related to question 1) and 2), would you expect more people to purchase insurance against losses associated with dental care or with hospital care? Why?

Trefor, a US firm, has a sterling (£) receivable of £300,000 from a UK customer due one year from now. Trefor has no use for sterling currency and will exchange the receipt into US dollars ($). The spot exchange rate now is £1=$1.34 and the one- year forward exchange rate is £1=$1.31. Assume the forecasted spot rate in one year’s time is £1=$1.28 or £1=$1.38, with equal probability. The discount rate is zero.

0. (a) What is the expected dollar value of Trefor’s receivable if it chooses:

   1. (i) not to hedge the receipt?

   2. (ii) to use a forward hedge?

1. (b) One year sterling put options and sterling call options are available at a cost of

   $0.03 per £ with an exercise price of £1.32.

   1. (i) How could Trefor make use of an option hedge for its sterling receivable?

   2. (ii) What will be the expected value in dollars of the outcome of the option hedge?

2. (c) If Trefor is concerned only about downside risk, is it better to choose the forward hedge or the option hedge? Explain. (60 words)

3. (d) An alternative hedging strategy for Trefor is to use futures contracts. Are there any advantages to using futures instead of a forward exchange extract? Explain. (60 words)

4. (e) Briefly discuss the implications of the Capital Asset Pricing Model for the relationship between the current spot price of an asset and the discount offered by the seller of a futures contract.

I'll give good rating please help.

what are the market growth rates for the Retail pharmaceutical industry from 2015-2019 in the US? Please describe whether they are positive or negative.

3. Trefor, a US firm, has a sterling (£) receivable of £300,000 from a UK customer due one year from now. Trefor has no use for sterling currency and will exchange the receipt into US dollars ($). The spot exchange rate now is £1=$1.34 and the oneyear forward exchange rate is £1=$1.31. Assume the forecasted spot rate in one UL20/0419 Page 5 of 8 year’s time is £1=$1.28 or £1=$1.38, with equal probability. The discount rate is zero. (a) What is the expected dollar value of Trefor’s receivable if it chooses: (i) not to hedge the receipt? (ii) to use a forward hedge? (b) One year sterling put options and sterling call options are available at a cost of $0.03 per £ with an exercise price of £1.32. (i) How could Trefor make use of an option hedge for its sterling receivable? (ii) What will be the expected value in dollars of the outcome of the option hedge? (c) If Trefor is concerned only about downside risk, is it better to choose the forward hedge or the option hedge? Explain. (60 words) (d) An alternative hedging strategy for Trefor is to use futures contracts. Are there any advantages to using futures instead of a forward exchange extract? Explain. (60 words) (e) Briefly discuss the implications of the Capital Asset Pricing Model for the relationship between the current spot price of an asset and the discount offered by the seller of a futures contract. (100 words)

Trefor, a US firm, has a sterling (£) receivable of £300,000 from a UK customer due one year from now. Trefor has no use for sterling currency and will exchange the receipt into US dollars ($). The spot exchange rate now is £1=$1.34 and the oneyear forward exchange rate is £1=$1.31. Assume the forecasted spot rate in one UL20/0419 Page 5 of 8 year’s time is £1=$1.28 or £1=$1.38, with equal probability. The discount rate is zero.

(a) What is the expected dollar value of Trefor’s receivable if it chooses:

(i) not to hedge the receipt?

(ii) to use a forward hedge?

(b) One year sterling put options and sterling call options are available at a cost of $0.03 per £ with an exercise price of £1.32.

(i) How could Trefor make use of an option hedge for its sterling receivable?

(ii) What will be the expected value in dollars of the outcome of the option hedge?

(c) If Trefor is concerned only about downside risk, is it better to choose the forward hedge or the option hedge? Explain. (60 words)

(d) An alternative hedging strategy for Trefor is to use futures contracts. Are there any advantages to using futures instead of a forward exchange extract? Explain. (60 words)

(e) Briefly discuss the implications of the Capital Asset Pricing Model for the relationship between the current spot price of an asset and the discount offered by the seller of a futures contract. (100 words)

Trefor, a US firm, has a sterling (£) receivable of £300,000 from a UK customer due one year from now. Trefor has no use for sterling currency and will exchange the receipt into US dollars ($). The spot exchange rate now is £1=$1.34 and the oneyear forward exchange rate is £1=$1.31. Assume the forecasted spot rate in one year’s time is £1=$1.28 or £1=$1.38, with equal probability. The discount rate is zero.

(a) What is the expected dollar value of Trefor’s receivable if it chooses:

(i) not to hedge the receipt?

(ii) to use a forward hedge?

(b) One year sterling put options and sterling call options are available at a cost of $0.03 per £ with an exercise price of £1.32.

(i) How could Trefor make use of an option hedge for its sterling receivable?

(ii) What will be the expected value in dollars of the outcome of the option hedge?

(c) If Trefor is concerned only about downside risk, is it better to choose the forward hedge or the option hedge? Explain. (60 words)

(d) An alternative hedging strategy for Trefor is to use futures contracts. Are there any advantages to using futures instead of a forward exchange extract? Explain. (60 words)

(e) Briefly discuss the implications of the Capital Asset Pricing Model for the relationship between the current spot price of an asset and the discount offered by the seller of a futures contract. (100 words)