Expert answer:Financial Management Quiz
Answer & Explanation:12012015.docx
12012015.docx
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QUESTION 1
Suppose the exchange rate between U.S. dollars and Swiss francs is SF 1.3433 = $1.00, and the
exchange rate between the U.S. dollar and the euro is $1.00 = 0.9121 euros. What is the crossrate of Swiss francs to euros (SF/Euro)?
Enter your answer rounded off to FOUR decimal points.
QUESTION 2
In New York, you can exchange $1 for €0.8575 or £0.7. Suppose that, in Berlin, £1 costs
€1.1515. How much profit can you earn on $10,998 using triangle arbitrage?
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer
box. For example, if your answer is $12.345 then enter as 12.35 in the answer box
QUESTION 3
The exchange rate is 1.0978 Swiss francs per U.S. dollar. How many U.S. dollars are needed to
purchase 1 Swiss franc?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box. For
example, if your answer is $12.345 then enter as 12.35 in the answer box.
QUESTION 4
ABC Company sells 2,117 chairs a year at an average price per chair of $168. The carrying cost
per unit is $21.45. The company orders 218 chairs at a time and has a fixed order cost of $62.6
per order. The chairs are sold out before they are restocked. What are the total shortage costs?
Enter your answer rounded off to two decimal points. Do not enter comma or $ in the answer
box. For example, if your answer is 12.345 then enter as 12.35 in the answer box.
QUESTION 5
ABC Company sells 2,265 chairs a year at an average price per chair of $170. The carrying cost
per unit is $25.49. The company orders 500 chairs at a time and has a fixed order cost of $65 per
order. The chairs are sold out before they are restocked. What is the economic order quantity?
Enter your answer rounded off to two decimal points. Do not enter comma in the answer box.
For example, if your answer is 12.345 then enter as 12.35 in the answer box.
QUESTION 6
You just returned from a trip to Venezuela and have 5,912 bolivares fuertes in your pocket. How
many dollars will you receive when you exchange this money if the U.S. dollar equivalent of the
bolivares fuertes is 0.1815?
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer
box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
QUESTION 7
Suppose one U.S. dollar can purchase 141 yen today. If the yen depreciates by 3% tomorrow,
how many yen could one U.S. dollar buy tomorrow?
Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then
enter as 12.35 in the answer box.
QUESTION 8
The exchange rate is 1.0128 Swiss francs per U.S. dollar. How many U.S. dollars are needed to
purchase 3,154 Swiss francs?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box. For
example, if your answer is $12.345 then enter as 12.35 in the answer box.
QUESTION 9
ABC Company sells 3,755 chairs a year at an average price per chair of $191. The carrying cost
per unit is $20.71. The company orders 543 chairs at a time and has a fixed order cost of $127
per order. The chairs are sold out before they are restocked. How many orders will company
place if it follows the economic order quantity model?
Enter your answer rounded off to two decimal points. Do not enter comma in the answer box.
For example, if your answer is 12.345 then enter as 12.35 in the answer box.
QUESTION 10
Suppose the exchange rate between U.S. dollars and Swiss francs is SF 1.119 = $1.00, and the
exchange rate between the U.S. dollar and the euro is $1.00 = 0.9139 euros. What is the crossrate of euros to Swiss francs (Euro/SF)?
Enter your answer rounded off to FOUR decimal points.
QUESTION 11
Your friend from Germany has decided to come and visit you in the United States. You estimate
the cost of her trip at $2,996. What is the cost to her in euros if the U.S. dollar equivalent of the
euro is 1.2134?
QUESTION 12
You can exchange $1 for either C$1.2052 or ¥123.5. What is the cross rate between the Japanese
yen and the Canadian dollar? That is, solve for ¥ per C$.
Enter your answer rounded off to two decimal points.
QUESTION 13
ABC Company sells 3,668 chairs a year at an average price per chair of $140. The carrying cost
per unit is $22.49. The company orders 395 chairs at a time and has a fixed order cost of $120.6
per order. The chairs are sold out before they are restocked. What are the total carrying costs?
Enter your answer rounded off to two decimal points. Do not enter comma or $ in the answer
box. For example, if your answer is 12.345 then enter as 12.35 in the answer box.
QUESTION 14
Venture capital is most appropriate to be the source of funding for which one of the following?
Choose only one
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Seasonal production
Global expansion for an established, profitable firm
New, high-risk venture
Daily operations for an established, profitable firm
Bankruptcy reorganization
QUESTION 15
ABCUnderwriters retains the difference between its buying price and its offering price on new
securities. What is this amount called?
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Rights price
Markup
Offer
Spread
Commission
QUESTION 16
Currently, you own 10% of the outstanding stock of ABC Company. The company has decided
to issue additional shares of stock and has given you the first option to purchase 10% of those
additional shares. Which one of the following will you be participating in if you opt to purchase
the shares you have been offered?
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Rights offer
Red herring offer
Private placement
IPO
General cash offer
…
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