# Finance Minicase Essay

1054 Words Sep 24th, 2013 5 Pages
MINI CASE

For your job as the business reporter for a local newspaper, you are asked to put together a series of articles on multinational finance and the international currency markets for your readers. Much recent local press coverage has been given to losses in the foreign exchange markets by JGAR, a local firm that is the subsidiary of Daedlufetarg, a large German manufacturing firm.

Your editor would like you to address several specific questions dealing with multinational finance. Prepare a response to the following memorandum from your editor:

To: Business Reporter
From: Perry White, Editor, Daily Planet
Re: Upcoming Series on Multinational Finance

In your upcoming series on multinational finance, I would like
…show more content…
An American business needs to pay (a) 15,000 Canadian dollars, (b) 1.5 million yen, and (c) 55,000 Swiss francs to businesses abroad. What are the dollar payments to the respective countries?

We will use spot rates for calculations since time of payment is not specified.

Canadian-dollar 15,000 = \$12,675 USD = 15000 x0.845
Japan-yen 1,500,000 = \$7,050 USD = 1500000 x0.0047
Swiss francs 55,000 = \$28,325 USD = 55000 x0.515

f. An American business pays \$20,000, \$5,000, and \$15,000 to suppliers in, respectively, Japan, Switzerland, and Canada. How much, in local currencies, do the suppliers receive?

Japan = \$20,000/0.0047 = \$4,255,319 Yen

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