key to Jan 29 2016 handout_homework

key to Jan 29 2016 handout_homework - in ciass/HW Yum in...

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Unformatted text preview: in ciass/HW Yum in 9/25/16 Nanak“— Economics 3800 Exchange rates cm 1/39/2016—én FC/USD 3., who“ finite per 0 H mm 13“” PM 5’ fgemme peat}; _ i 1'_ - . (Pm-a m'g' jg? fitsefi‘zfiitfit {twitter .1 @431: ~ $3itimifliflfig‘ffififiifl? .. . Meet} Bram-Mien moi fr'ae-eftfitétii}. ' ‘ . . figiéiéiéfi? (3??? 131mm i E01131; ' 1,00% ' ' ’ " {Item-Eat}? (Chump. ' 1. What was the USS/ARE exchange rate on 1/19/2016? lg. mg; i 3% e: ‘fiém a :2 <1} :3 it ‘ W“ “ M w t Wm M i m M , d A- ' . we ‘ hate meme Nazism ‘ M 2. Compute the exchange rate between the Brazilian real and Canadian doltar on 1/19/2016. 3. The exchange rate —— for Colombia -- since 2000 is piotted beéow. Did the Coiombian peso appreciate or depreciate in vaiue over the period represented by A and B? Exchange Rates Pesos per 3 Do 33m ‘- I ‘ m MWWM 300:"! i t . B M c: 20053 . . .. {VJ 63 {‘4 OS {13 EU 22 14 !. ‘2 .- ,m PIP/Te? Ehfif‘ge from A to " U.S. companies likely to take further big hits from Venezuela economic turmoil Business News | Tue Jan 19, 2016 by Tim McLaughlin £M A slew of major US. corporations are likely to announce in the next few weeks whether they will take big writedowns for their troubied Venezuela operations, and some may say they are leaving the country altogether. The companies may decide to slash the valuations of their businesses and take charges based on declines in some of the oil producing nation’s four exchange rates for the boiivar currency, of which three are official and one black market, and then deconsolidate the operations on their balance sheets, Wall Street securities analysts said. They may have more reason to accelerate the process after the sociaiist government on Friday declared a 60- day economic emergency, which would give President Nicolas Maduro wider powers to intervene in companies or iiniit access to already scarce dollars in Venezuela. It also disclosed that the nation’s economy contracted by 4.5 percent in the first nine months of last year while the official annual inflation rate was the world’s highest at 141.5 percent in that period, as plunging oil prices, and what critics of Maduro see as policy missteps, took an increasing toll. Venezuela’s information Ministr did not inimediatel res 0nd to an email seekin I comment. 5 The Reuters analysis shows that US. companies with exposure could face total writedowns of more than $3 billion if they revalue their assets in Venezuela using the less preferential Simadi exchange rate of nearly the past, many companies valued their assets using the main official rate of 6.3 lidlivars per dollar. Mme; But even that change may not reveal the full extent of the probiem given that the black market exchange rate has worsened to about 878 bolivars to the dollar from about 190 bolivars a year ago, according to dolartodaycom, a website that tracks the rate. 5. Suppose that the U.S. subsidiary, American Cyanamid de Venezuela has valued its Venezueia operations at as 60,000,000 (where 85 stands for Venezuelan bolivares-the currency of Venezuela). Translate that sum into USDs at “(nub-Wm t h e lgiiiui‘eidldlwdydhh n gaggifi WWW 6:15;} i 35‘ fill with 6. Suppose Cyanamid’s accountants tell the bosses that they should face the music. They are never going to be abie to exchange bolivares into USDs at the official exchange rate. They had better restate the value of their Venezuela holding a the official Simadi exchange rate. Calculate the value of their operations using the Simadi exchange rate. ache} are? E amvfinramxwrxm awnwwmmmfi‘m ‘ ' ' at t l lien. ill lg" so? :15: l w" e News”, / ...
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