Posted: April 4th, 2019

4-2 Assignment: Foreign Exchange

4-2 Assignment: Foreign Exchange

300 words.

Can I See Writer Credentials?

You can view anonymized writer profiles, highlighting their degrees and expertise, to feel confident in who’s handling your paper. Each profile gives you a clear picture of their background, so you know they’re qualified for the job. Our team ensures every writer meets high academic standards. This transparency helps students make informed choices and find the best academic writing help online.

Please follow the rubric Keenly. Sources should be from 2019 and above.
Overview

Foreign exchange impacts the profitability of transactions in international markets. It can turn a profitable business into one that loses money and can turn an unprofitable business into one that makes money.

In this assignment, you will analyze the impact of foreign exchange on different business scenarios and present your findings in a short business memo.
Assessment Help – – Scenario

You manage the international business for a manufacturing company. You are responsible for the overall profitability of your business unit. Your company ships your products to Malaysia. The retail stores that buy your products there pay you in their local currency, the Malaysian ringgit (MYR). All sales for the first quarter are paid on April 1st and use the exchange rate at the close of business on April 1st or the first business day after April 1st if it falls on a Saturday or Sunday. The company has sales contracts with different vendors that determine the number of units sold well in advance. The company is contractually obligated to sell 4,000 units for exactly 1.25 million MYR for the first quarter. The break-even point for each unit is $90 in U.S. dollars. Use the following foreign exchange rates:

What If I Need Last-Minute Changes?

No problem! Request revisions anytime within 7 days, and we’ll tweak your paper quickly to meet your needs, free of charge. Our flexible process keeps your paper on track. Just update your order details in your account. Fast and responsive revision services are key for students managing tight deadlines.

On January 1, the daily spot rate is 3.13 MYR, and the forward rate is 0.317 U.S. dollars/MYR for April 1st of the same year.
On April 1, the daily spot rate is 3.52 MYR.

Prompt

Using the information above, create a short business memo that explains the profitability, viability, and importance of considering foreign exchange on the basis of the scenarios below.

Assessment Help – – Scenario 1: The company uses the spot rate on April 1st to convert its sales revenue in MYR to U.S. dollars.

Can I Request Revisions to My Completed Essay?

Absolutely, our essay writing service offers free, unlimited revisions within 14 or 30 days, depending on your order, to meet your expectations. Simply contact your writer or our 24/7 support team to request adjustments, ensuring your paper aligns perfectly with your needs. We’re dedicated to your satisfaction, refining your essay until it’s just right. Trust us for exceptional, customizable academic assistance! Students often rely on our revision policy to achieve polished and professional academic results.

Assessment Help – – Scenario 2: On January 1st, the company uses that day’s forward rate today to lock in a foreign exchange rate for its expected 1.25 million MYR in sales. This means the company agreed to exchange 1.25 million MYR using the forward rate on January 1st when April 1 arrives.

Assessment Help – – Scenario 3: Another option for the company is to spend the foreign currency and avoid any currency exchange. Because it is a manufacturing company, raw materials are always needed.

Specifically, you must address the following rubric criteria:

Foreign Exchange Calculations: Determine the profitability of the international business by using foreign exchange calculations for the first and second scenarios.

Spend or Save: Discuss what you would need to consider when determining if the company should buy raw materials with the foreign currency in an effort to avoid foreign exchange risk and whether this is a viable option for the company.

How Do You Define Originality?

Originality means crafting every paper from scratch, with unique content and proper citations, verified by plagiarism checks for 95%+ uniqueness. You’ll receive a free originality report with every order. We guarantee your paper is one-of-a-kind. Academic integrity is our priority, ensuring your work is plagiarism-free and trustworthy.

Conclusion: After determining the result for each scenario, explain the importance to a company’s financial results of considering foreign exchange risk.

Human Written Academic Papers – Guidelines for Submission

Submit this assignment as a 300-word Microsoft Word document. Sources should be cited according to APA style.
_________________-
To: CEO
From: Bard
Date: March 8, 2023
Subject: Foreign Exchange Impact on International Business

As you know, our company has been expanding into the Malaysian market. This has been a successful endeavor, and we have seen strong sales growth in the past year. However, we are now facing a new challenge: foreign exchange risk.

Foreign exchange risk is the risk that the value of the Malaysian ringgit (MYR) will change between the time we sell our products and the time we convert our sales revenue into U.S. dollars. If the MYR weakens, we will receive fewer U.S. dollars for our sales, which could reduce our profits.

Can You Follow My Professor’s Unique Guidelines?

Absolutely! Share your professor’s rubric or specific instructions, and we’ll tailor the paper to meet every detail, no matter how unique. Even complex formatting or niche topics are no problem for our team. Our writers thrive on precision and customization. Upload your guidelines in the order form for best results. Following strict academic rubrics helps us deliver exactly what professors expect, boosting your grades.

To mitigate this risk, we have three options:

Use the spot rate on April 1st to convert our sales revenue in MYR to U.S. dollars.
Use the forward rate on January 1st to lock in a foreign exchange rate for our expected 1.25 million MYR in sales.
Spend the foreign currency and avoid any currency exchange.
Assessment Help – – Scenario 1: Use the spot rate on April 1st

If we use the spot rate on April 1st, we will receive $4,000,000 / 3.52 MYR = $1,136,363.64 in U.S. dollars. This is a profit of $136,363.64, assuming that our break-even point is $90 per unit.

Assessment Help – – Scenario 2: Use the forward rate on January 1st

If we use the forward rate on January 1st, we will receive $4,000,000 / 0.317 MYR = $12,658,227.85 in U.S. dollars. This is a profit of $2,658,227.85, which is significantly higher than the profit we would make if we used the spot rate on April 1st.

Can You Provide Sample Papers?

Yes, we offer sample papers upon request to showcase our quality and style, helping you decide before placing an order. These samples reflect our commitment to excellence. Contact support to view samples relevant to your needs. Reviewing samples lets you see how our writers handle academic research and formatting at a professional level.

Assessment Help – – Scenario 3: Spend the foreign currency

If we spend the foreign currency, we will not be exposed to foreign exchange risk. However, we will also not be able to take advantage of any potential gains in the value of the MYR.

Spend or Save?

The decision of whether to spend the foreign currency or to save it depends on a number of factors, including the company’s risk tolerance, the expected future value of the MYR, and the availability of alternative investment opportunities.

How Do I Specify My Requirements?

Use our order form to detail your topic, style, and any specific instructions, or upload files for your writer to follow precisely. Clear instructions ensure a perfect paper every time. Our support team can guide you if needed. Detailed requirements give us the roadmap to craft academic writing that fully meets your expectations.

If the company is risk-averse, it may prefer to spend the foreign currency and avoid any potential losses. However, if the company is willing to take on some risk, it may be able to earn a higher return by saving the foreign currency.

Conclusion

The importance of considering foreign exchange risk to a company’s financial results cannot be overstated. By locking in a foreign exchange rate, a company can protect itself from losses due to fluctuations in the value of the currency. This can be especially important for companies that do a significant amount of business in foreign markets.

In our case, using the forward rate on January 1st would have resulted in a profit of $2,658,227.85, which is significantly higher than the profit we would have made if we had used the spot rate on April 1st. This shows the importance of considering foreign exchange risk when making business decisions.

Are Your Writers Native English Speakers?

Many are native speakers, and all are fluent, passing strict language tests to ensure clear, professional writing for your papers. Every writer is evaluated for grammar, tone, and flow to match academic standards. You can request a native speaker if preferred. This ensures your paper maintains a natural flow and academic credibility.

Order|Paper Discounts