1. The
exchange rate is 1.22 Swiss francs per U.S. dollar. How many U.S. dollars are
needed to purchase 1,500 Swiss francs?
2. You are planning an extended trip to Hong Kong. You have located some housing that you can
lease for 9,400 Hong Kong dollars per month.
What is the cost per month in U.S. dollars if the exchange rate is HK$1 =
$.1279?
3. Your German friend has decided to come and visit
you in the U.S.
You estimate the cost of her trip at $4,800. What is the cost to her in Euros if
the U.S. dollar equivalent of the euro 1.58?
4. Currently,
you can purchase either 106 Canadian dollars or 123 Japanese yen for $100. What
is the C$/¥ cross rate?
5. Breakeven Point Analysis: TeeOff Corp produces golf
umbrellas for several sports retail outlets. Their fixed costs are $600,000.
The sell the umbrellas for $9.25 (MSRP). The variable costs per umbrella (labor
and material) is $4.25. How many umbrellas must they sell to breakeven?
6.Clemson Software is considering a new project whose data are
shown below. The required equipment has
a 3-year taxlife, after which it will be
worthless, and it will be depreciated by the straight-line method over 3
years. Revenues and other operating
costs are expected to be constant over the project’s 3-year life. What is the project’s Year 1 cash flow?
Equipment cost
(depreciable basis) $65,000
Straight-line
depreciation rate 33.333%
Sales revenues, each year $60,000
Operating costs (excl.
depreciation) $25,000
Tax rate 35.0%
7. As assistant to the CFO of
Boulder Inc., you must estimate the Year 1 cash flow for a project with the
following data. What is the Year 1 cash
flow?
Sales revenues $13,000
Depreciation $4,000
Other operating costs $6,000
Tax rate 35.0%
8. Your company, CSUS Inc., is
considering a new project whose data are shown below. The required equipment has a 3-year tax life,
and the accelerated rates for such property are 33%, 45%, 15%, and 7% for Years
1 through 4. Revenues and other
operating costs are expected to be constant over the project’s 10-year expected
operating life. What is the project’s
Year 4 cash flow?
Equipment cost
(depreciable basis) $70,000
Sales revenues, each year $42,500
Operating costs (excl.
depreciation) $25,000
Tax rate 35.0%
