currency translation methods

Ajax Manufacturing's German subsidiary has the following balance sheet(in DM): Cash, marketable securities: 250,000 Accounts receivable 1,000,000 Inventory ( at market) 2,700,000 Fixed assets: 5,100,000 Total assets DM 9,050,000 Current liabilities DM 750,000 Long-term debt 3,400,000 Equity 4,900,000 Total liabilities plus equity: DM 9,050,000. Suppose the DM appreciates from $0.70 to $0.76 during the period. Under the current rate method what is Ajax's traslation gain(loss)?

currency translation methods

Ajax Manufacturing's German subsidiary has the following balance sheet(in DM): Cash, marketable securities: 250,000 Accounts receivable 1,000,000 Inventory ( at market) 2,700,000 Fixed assets: 5,100,000 Total assets DM 9,050,000 Current liabilities DM 750,000 Long-term debt 3,400,000 Equity 4,900,000 Total liabilities plus equity: DM 9,050,000. Suppose the DM appreciates from $0.70 to $0.76 during the period. Under the monetary/nonmonetary method what is Ajax's traslation gain(loss)?

Capital Budgeting Mini-Case

2. Capital Budgeting Mini-Case Your company is thinking about acquiring another corporation. You have two choices; the cost of each choice is $250,000. You cannot spend more than that, so acquiring both corporations is not an option. The following are your critical data: a. Corporation A: 1) Revenues = 100K in year one, increasing by 10% each year. 2) Expenses = 20K in year one, increasing by 15% each year. 3) Depreciation Expense = 5K each year. 4) Tax Rate = 25% 5) Discount Rate = 10% b. Corporation B: 1) Revenues = 150K in year one, increasing by 8% each year. 2) Expenses = 60K in year one, increasing by 10% each y... click for more

Explain how a bank could lose on a transaction assuming no 'hedging'.

PLEASE DO NOT TAKE THE PROBLEM, UNLESS YOU CAN ANSWER BOTH PARTS OF THE PROBLEM. Please include in your response, the formulas for this problem, along with a detailed explanation of how it is solved, and your rationale for reaching your conclusions. You are the Vice President of Finance for Daniel's Resources, headquartered in Phoenix, Arizona. In January 2002, your firm's Canadian subsidiary obtained a 6-month loan of 100,000 Canadian dollars from a bank in Tuscon, to finance the acquisition of a titanium mine in Quebec province. The loan will be repaid in Canadian dollars. At the time when Daniel's Resources obtained the loan, the spot exchange rate was USD $0.6580/$1 Canadian do... click for more

Value of Bonds

This should be an easy one, for those with financial calculators. PLEASE POST ANSWERS AND MANUAL CALCULATIONS/FORMULAS for all 3 parts. Smith Industries has a $1,000 par value bond with an 8 percent coupon interest rate outstanding. The bond has 12 years remaining to maturity date. If interest is paid annually, what is the value of the bond when the required return is: A) 7%, B) 8%, C) 10%