On March 1, Pimlico Corporation (a U.S.-based company) expects to order merchandise from a supplier in Sweden in three months. On March 1, when the spot rate is $0.10 per Swedish krona, Pimlico enters into a forward contract to purchase 500,000 Swedish kroner at a threemonth forward rate of $0.12. At the end of three months, when the spot rate is $0.115 per Swedish krona, Pimlico orders and receives the merchandise, paying 500,000 kroner. What amount does Pimlico report in net income as a result of this cash flow hedge of a forecasted transaction?
a. $10,000 Premium Expense plus a $7,500 positive Adjustment to Net Income when the merchandise is purchased.
b. $10,000 Discount Expense plus
a $5,000 positive Adjustment to Net Income when the merchandise is purchased.
c. $2,500 Premium Expense plus a $5,000 negative Adjustment to Net Income when the merchandise is purchased.
d. $2,500 Premium Expense plus a $2,500 positive Adjustment to Net Income when the merchandise is purchased
The dividend growth model: î© Is only as reliable as the estimated rate of growth. î© Can only be used if historical dividend information is available. î© Considers th...Sep 08 2020
A local energy provider offers a landowner $180,000 for the exploration rights to natural gas on a certain site and the option for future development. This option, if exe...May 08 2020
On July 1, 2018 a company loans one its employee $27, 000 and accepts a nine-month, 9% note receivable. Calculate the amount of interest revenue the company will recogniz...Mar 22 2020
What type of business will you recommend Zero Working Capital to and what kind of advice will you offer to those companies?Aug 23 2020
When serving as a _____, a bill of lading specifies that the carrier is obligated to provide a transportation service in return for a certain charge. A. contractB. recei...Jan 11 2020
Suppose that when you consume the third piece of chicken, total utility rises from 420 to 520. Marginal utility for the third piece of chicken is: a. 520 b. 420 c. 140 d. 100May 18 2018
The amount of money that a firm pays to buy inputs is calledA. total costB. variable costC. marginal costD. fixed cost.May 29 2018
comparison of pathogenicity and virulence among microorganismshow microorganisms vary in both their pathogenicity and virulence using the opportunistic infections as exam...Apr 16 2020
Draw an indifference curve and its weakly preferred set for two goods that exhibit following preferences: 1. monotonic and convex preferences 2. monotonic and concave pre...May 04 2020
Assume that a pet food manufacturer is considering adding two types of pet food to ts existing product line. Research had determined that good demand exists for dog food ...Mar 20 2020