Assume the Following Information: Also Assume That a U

question 70

Multiple Choice

Assume the following information: Also assume that a U.S. exporter denominates its Swiss exports in Swiss francs and expects to receive SF600,000 in 1 year.
Using the information above, what will be the approximate value of these exports in 1 year in U.S. dollars given that the firm executes a forward hedge?

• A) $234,000.
• B) $238,584.
• C) $240,000.
• D) $236,127.

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Definitions:

Cash Flow Statement

A financial report that tracks the amount of cash and cash equivalents entering and leaving a company.

Amortization

The process of gradually writing off the initial cost of an asset over a period, often used for intangible assets like patents and copyrights.

Bond Discount

The difference between the face value of a bond and the price for which it sells when the selling price is lower than its face value.

Indirect Method

A cash flow statement technique that starts with net income and adjusts for changes in balance sheet accounts to arrive at operating cash flow.