Need Help with this Question or something similar to this? We got you! Just fill out the order form (follow the link below), and your paper will be assigned to an expert to help you ASAP.
Foreign exchange impacts the profitability of transactions in international markets.
Posted at 15:06h
in business
by
Share
Overview
Foreign exchange impacts the profitability of transactions in international markets. It can turn a profitable business into one that loses money and can turn an unprofitable business into one that makes money.
In this assignment, you will analyze the impact of foreign exchange on different business scenarios and present your findings in a short business memo.
Scenario
You manage the international business for a manufacturing company. You are responsible for the overall profitability of your business unit. Your company ships your products to Malaysia. The retail stores that buy your products there pay you in their local currency, the Malaysian ringgit (MYR). All sales for the first quarter are paid on April 1st and use the exchange rate at the close of business on April 1st or the first business day after April 1st if it falls on a Saturday or Sunday. The company has sales contracts with different vendors that determine the number of units sold well in advance. The company is contractually obligated to sell 4,000 units for exactly 1.25 million MYR for the first quarter. The break-even point for each unit is $90 in U.S. dollars. Use the following foreign exchange rates:
On January 1, the daily spot rate is 3.13 MYR, and the forward rate is 0.317 U.S. dollars/MYR for April 1st of the same year.
On April 1, the daily spot rate is 3.52 MYR.
Prompt
Using the information above, create a short business memo that explains the profitability, viability, and importance of considering foreign exchange on the basis of the scenarios below.
Scenario 1: The company uses the spot rate on April 1st to convert its sales revenue in MYR to U.S. dollars.
Scenario 2: On January 1st, the company uses that days forward rate today to lock in a foreign exchange rate for its expected 1.25 million MYR in sales. This means the company agreed to exchange 1.25 million MYR using the forward rate on January 1st when April 1 arrives.
Scenario 3: Another option for the company is to spend the foreign currency and avoid any currency exchange. Because it is a manufacturing company, raw materials are always needed.
Specifically, you must address the following rubric criteria:
Foreign Exchange Calculations: Determine the profitability of the international business by using foreign exchange calculations for the first and second scenarios.
Spend or Save: Discuss what you would need to consider when determining if the company should buy raw materials with the foreign currency in an effort to avoid foreign exchange risk and whether this is a viable option for the company.
Conclusion: After determining the result for each scenario, explain the importance to a companys financial results of considering foreign exchange risk.
Related Tags
Academic
APA
Assignment
Business
Capstone
College
Conclusion
Course
Day
Discussion
Double Spaced
Essay
English
Finance
General
Graduate
History
Information
Justify
Literature
Management
Market
Masters
Math
Minimum
MLA
Nursing
Organizational
Outline
Pages
Paper
Presentation
Questions
Questionnaire
Reference
Response
Response
School
Subject
Slides
Sources
Student
Support
Times New Roman
Title
Topics
Word
Write
Writing
Clients' Reviews about Our Services
Client ID 45637
U.S.A
Brilliant services. I ordered a 4 page essay and it was delivered in less than 24hours with every detail intact!
Client ID 45783
U.K
Aceassignment is the way to go. The writers are humble and patient with clients. I know this after using the website for about an year
Client ID 45214
U.K
My writer did a brilliant job. Not only did she delivered the paper on time and it was superb as my professor granted me an A without any criticism
Client ID 45009
CAD
I was running late with my assignment. I run into aceassignment on google, placed my order and within less than 18 hours my page essay was delivered. Thank you Aceassignment.
Client ID 45870
U.S.A
I've been using Aceassignment for about 2 years. My writer always delivers quality work. Mind you whenever I request for a revision it's always done ASAP and free of charge
Client ID 44218
U.S.A
At first, I was scared and hesitant about using this website. Didn't know if they would deliver, but they assured me they will. And for sure they did. I will definitely continue to use their service!
Client ID 45622
U.S.A
Easy to use website. You simply give your essay's instructions, make payment and before you known it the paper is delivered to you.
Client ID 43964
U.S.A
Unlike other platforms, this website is quite cheap and the quality is high. I have them manage my whole class and everything has been smooth this far.
Client ID 41996
U.K
Thanks for the excellent job. Swift and on the subject, just the way I like it. The Support team was quite nice to me, helped me with the order placing process.
Client ID 47654
AU
They are a marvel. I love their support team, they are so polite, it’s like speaking to a butler or something. Very pleasant people and good service of course.
Client ID 45670
FRA
Thank you for the help, I took my time and ordered a 14 days long essay. It came much earlier, around 7 days after I ordered it. Oh, and it was good, of course. I like the writer who did that, will definitely use again.
Client ID 22368
US
What I received was great. I forgot to mention in the instructions field that I needed reference page and by default, there was 0 in the number of references. I was surprised to see a full-fledged reference page in my paper with relevant citations. Bravo!
Client ID 46325
U.S.A
I was bombarding him with fine tuning and he handled it professionally. Thank you I will hire again the writer
Client ID 456820
U.S.A
Provided exceptional essay writing help in a short period of time. I plan to work with writer on many more projects!
Client ID 36890
UAE
Awesome paper in such a short amount of time. Was in a jam with another service who didn't deliver, but my writer did the job correctly. I will use her again to do my essays for sure!
Client ID 41427
U.K
Pretty good essay writer. I only made a couple of adjustments. She caught some instructions for the essay writing assignment that I didn't even notice, including them which was a pleasant surprise. Definitely recommend.
Client ID 45009
CAD
It was a very long paper, but the writer followed all the instructions, and she even finished the paper 5 days before the due date. Will write an essay with her again, thanks!
Client ID 36984
U.S.A
Writer was timely and proficient. I had to ask for a revision, but I got it back quickly with no other issues. Would use this essay writing service again.
Client ID 42960
CAD
Paper writing was prepared and submitted prior to the completed request date, and there were changes made quickly after I requested. This paper writer was accurate with numbers.
Client ID 31638
U.K
The first time I ordered here and it was a success. I received my order on time and according to my instructions. Thank you!
Client ID 46041
CAD
When I first discovered this website I was hesitant on whether they will deliver a plag free paper. The support team reassured me of their plagiarism policy. In deed they kept their word as the paper I got was authentic and plagiarism free.