On 4/1/18, a U Discount Rate Is 12

question 41

Multiple Choice

On 4/1/18, a U.S.Company commits to sell a piece of equipment to a French customer.At that time, the U.S.company enters into a forward contract to sell foreign currency on 8/1/18 (120 days) .Delivery will take place 7/1/18 with payment due on 8/1/18.The fiscal year end for the company is 6/30/18.The sales price of the equipment is 200,000 Euros.Various exchange rates are as follows: ?

$$\begin{array} { l r r } & \text { Spot } & \text { Forward } \\\hline 4 / 1 / 18 & 1 \mathrm { FC } = \$ 0.60 & 1 \mathrm { FC } = \$ 0.58 \\6 / 30 / 18 \text { and } 7 / 1 / 18 & 1 \mathrm { FC } = \$ 0.58 & 1 \mathrm { FC } = \$ 0.56 \\8 / 1 / 18 & 1 \mathrm { FC } = \$ 0.55 & 1 \mathrm { FC } = \$ 0.55\end{array}$$ Discount rate is 12%.What is the value of Forward Contract on 6/30?

• A)4,000 debit
• B)3,960 debit
• C)4,000 credit
• D)3,960 credit

Evaluate the challenges of local optimization within supply chains.

Understand the principles and advantages of different supplier relationship models, including drop shipments and joint ventures.

Examine methods for effective supply chain management and optimization strategies.

Grasp the role of distribution systems in the supply chain and their impact on efficiency.

---

Definitions:

Marginal Analysis

An examination of the benefits and costs of one more unit of a product or activity to help make efficient allocation decisions.

Full Employment

This term refers to the condition where all available labor resources are being used in the most economically efficient way, with no involuntary unemployment.

Production Possibilities Curve

A graph that shows the different quantities of two goods that an economy can produce with fixed resources and technology.

Human Economic Wants

Desires that require resources to satisfy, emphasizing the economic aspect of needs and desires.