base, so any future project should earn more than that.
A wildcard in this example is the impact of foreign exchange, since South Coast will be working with a German supply chain partner. That creates an exposure to foreign currency risk, in particular because of the contract nature that requires payments over a period of time. Foreign exchange rate risk will be discussed later in this report, but suffice to say there is an increased risk in the sterling-euro pairing on account of the uncertainty surrounding the Brexit vote (Chan, 2016).
The first number that has to be calculated is the cost of capital for South Coast. The formula… Continue Reading...
domestic nation's assets overseas, assets owned by foreign countries within the domestic nation and the net financial derivatives. There are three kinds of foreign exchange markets that include the fixed, managed floating and the independent floating exchange rate systems. The elements of the foreign exchange market includes the forex market, which is split into the spot market, futures market and forward market.
The international monetary system has evolved over the years. It started out with the gold standard where the monetary system had different currencies pegging their currencies to the market value of gold. This moved on to the Bretton Woods Agreement that included an international system having the U.S. dollar pegged at… Continue Reading...
returns. Key areas that the finance team must consider are optimal capital structure, foreign exchange exposure, and controls. Much of the following explanation of the finance function will focus on these key subject areas.
Risk Management
Risk management in finance encompasses a lot of different things. The most basic concept is that most risk from a corporation’s perspective is financial. Risk reflects what might happen to the company’s valuation. Valuation is subject to a lot of unknowns, and these unknowns carry with them a downside. Risk management seeks to balance the need to grow, with the need to minimize downside risk. By identifying… Continue Reading...
an important foreign exchange earner. Due to the lack of resources as well as capital to produce other goods for continued modernization, specifically electronic goods, most of the said countries became net importers of electronic goods. This led to more dependence on the stronger and more developed nations, and hence the emergence of neo-colonialism. According to Dwyer (2018), there are numerous instances of developed nation interventions throughout Africa, as well as the Middle East, that could thwart Africa’s development agenda. This is known as the dependence theory, and it is largely founded… Continue Reading...
recompense the losses incurred owing to the exchange rate to a certain extent and therefore it is expected that Apple will continue to face foreign exchange rate risk (Adinolfi, 2015).
Another economic factor impacting the operations of Apple is costs incurred by the company. For a long time now, Apple has instituted its manufacturing facilities in China and outsourcing its operations there in order to attain cost efficiencies in terms of resources and also cheaper labor. However, in recent years, this has come to be considerably more challenging owing to the fact that the wage rates in China have experienced a 64 percent increase in the past five years to $3.60 hourly wage rates.… Continue Reading...
of diverse ethnicities and backgrounds. The demographic of the class consisted of 12 students, 5 female, 7 male; 3 African-American, 1 Asian-American, 1 Hispanic-American, and 1 foreign exchange student from Germany, as well as 6 Caucasian Americans. The overall demographic of the school is about 75% Caucasian American, 15% African-American, 5% Hispanic-American, and 5% other. There is about a 50-50 mix of males and females in the student body. The teachers are mostly female, with only about 30% of the faculty being male. Less than 5% of the faculty is African-American. There is 1 Hispanic teacher. The school’s faculty is thus not very reflective of the study body in terms of ethnic background.
The Social Studies… Continue Reading...
