Samesong Ltd

question 29

Multiple Choice

Samesong ltd. needs €1,000,000 in 30 days. Samesong can earn 5 percent annualized on a German security. The current spot rate for the euro is £0.67. Samesong can borrow funds in the UK at an annualized interest rate of 6 per cent. If Samesong uses a money market hedge to hedge the payable, what is the cost of implementing the hedge?

• A) £641,832
• B) £680,152
• C) £670,556
• D) £670,000

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Definitions:

Indirect Labor

Costs associated with employees who are not directly involved in the production of goods or services but support those who are.

Employee Time Ticket

A document or electronic record used to track the number of hours worked by an employee, particularly for billing or payroll purposes.

Job Cost Sheets

Documents used to record and track expenses for specific jobs under the job-order costing method.

Direct Material

Raw materials that are directly traceable to the manufacturing of a specific product and constitute a significant portion of the product's costs.