Question

How would the company Apple find hedging important for protecting cash flows or profit margins?

How would the company Apple find hedging important for protecting cash flows or profit margins?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Apple is a global technology company and its products like computers, mobile phones and tablets etc are sold and used all over the world. As a result, it gets paid in all the different currencies of the world, which they have to convert in USD. So, given that they have receivables in emerging market currencies also, which have the risk of depreciation, in order to protect their cash flows and profit margins, they would be required to hedge these exposures. They can do that by using options or futures wherein they would be buying USD at a fixed rate by giving the emerging market currency at a future point in time. Hence, they can protect themselves from fluctuations in exchange rates.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Generating positive cash flows from operations is one of the most important cash flow activities of...
Generating positive cash flows from operations is one of the most important cash flow activities of a company. Select one: True False
How do I find the cash flows from the firm?
How do I find the cash flows from the firm?
When using the indirect method in the statement of cash? flows, the company would subtract the...
When using the indirect method in the statement of cash? flows, the company would subtract the net change in a current asset account if the balance increased over time.??T or F
Apple Company has provided the following information prior to any year-end bad debt adjustment: • Cash...
Apple Company has provided the following information prior to any year-end bad debt adjustment: • Cash sales, $143,000 • Cost of sales, $188,000 • Sales returns and allowances, $34,000 • Sales discounts, $20,000 • Gross profit, $218,000 • Selling and administrative expenses, $43,000 • Net income, $32,000 • Increase in accounts receivable, $70,000 Apple estimates bad debt expense assuming that 1% of credit sales have historically been uncollectible. How much is Bishop’s bad debt expense? (a) $4,170 (b) $2,170 (c)...
The following items appeared in the Investing Activities section of Apple Inc.’s statement of cash flows...
The following items appeared in the Investing Activities section of Apple Inc.’s statement of cash flows included in Form 10-K for the year ended September 26, 2015. (All amounts are in millions of dollars.) 2015 2014 2013 Purchases of marketable securities $(166,402) $(217,128) $(148,489) Proceeds from maturities of marketable securities 14,538 18,810 20,317 Proceeds from sales of marketable securities 107,447 189,301 104,130 Required: 1. What amount did Apple spend in 2015 to purchase marketable securities? $____?___ million How does this...
Jackson Company gathered the following data to prepare its 20X7 statement of cash flows: Profit $40,000...
Jackson Company gathered the following data to prepare its 20X7 statement of cash flows: Profit $40,000 Depreciation expense 5,000 Trade receivables decrease 3,000 Wages payable increase 4,000 Amortization of patent 1,000 Income tax payable decrease 2,000 Based only on the above data, the net cash inflow from operating activities during 20X7 was which of the following? A - $51,000. B - $53,000. C - $45,000. D - $43,000.
Understanding cash flows is a key factor in identifying how a business is performing. Using your...
Understanding cash flows is a key factor in identifying how a business is performing. Using your own words, identify the difference between operating, investing, and financing cash flows. Also identify why each one is important to a business.
Discuss cash and cash equivalents. How important are the items that fall within this category to...
Discuss cash and cash equivalents. How important are the items that fall within this category to the successful operations of a company?
Find the modified internal rate of return (MIRR) for the following series of future cash flows...
Find the modified internal rate of return (MIRR) for the following series of future cash flows if the company is able to reinvest cash flows received from the project at an annual rate of 13.72 percent.The initial outlay is $470,600. Year 1: $185,900 Year 2: $185,100 Year 3: $125,700 Year 4: $183,400 Year 5: $184,100 Round the answer to two decimal places in percentage form. How do I do this in excel?
The accountant for TI Company is preparing the company's statement of cash flows for the fiscal...
The accountant for TI Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year 151,000 Cash dividends declared for the year 46,000 Net income for the year 92,000 16) What is the ending balance for retained earnings? A. 264,000 B. 13,000 C. 243,000 D. 197,000 E. 105,000 17) Noncash investing and financing activities may be disclosed in A. A notes in...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT