Loading...

Messages

Proposals

Stuck in your homework and missing deadline? Get urgent help in $10/Page with 24 hours deadline

Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades.

Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support

Decision by blades inc to invest in thailand

29/10/2021 Client: muhammad11 Deadline: 2 Day

International Finance DQ

BLADES, INC. CASE: Assessment of Government Influence on Exchange Rates
CASE STUDY FOR DISCUSSION 1A
Recall that Blades, the U.S. manufacturer of roller blades, generates most of its revenue and incurs most of its expenses in the United States. However, the company has recently begun exporting roller blades to Thailand. The company has an agreement with Entertainment Products, Inc., a Thai importer, for a 3-year period. According to the terms of the agreement, Entertainment Products will purchase 180,000 pairs of “Speedos,” Blades’ primary product, annually at a fixed price of 4,594 Thai baht per pair. Due to quality and cost considerations, Blades is also importing certain rubber and plastic components from a Thai exporter. The cost of these components is approximately 2,871 Thai baht per pair of Speedos. No contractual agreement exists between Blades, Inc., and the Thai exporter. Consequently, the cost of the rubber and plastic components imported from Thailand is subject not only to exchange rate considerations but to economic conditions (such as inflation) in Thailand as well. Shortly after Blades began exporting to and importing from Thailand, Asia experienced weak economic conditions. Consequently, foreign investors in Thailand feared the baht’s potential weakness and withdrew their investments, resulting in an excess supply of Thai baht for sale. Because of the resulting downward pressure on the baht’s value, the Thai government attempted to stabilize the baht’s exchange rate. To maintain the baht’s value, the Thai government intervened in the foreign exchange market. Specifically, it swapped its baht reserves for dollar reserves at other central banks and then used its dollar reserves to purchase the baht in the foreign exchange market. However, this agreement required Thailand to reverse this transaction by exchanging dollars for baht at a future date. Unfortunately, the Thai government’s intervention was unsuccessful, as it was overwhelmed by market forces. Consequently, the Thai government ceased its intervention efforts, and the value of the Thai baht declined substantially against the dollar over a 3-month period. When the Thai government stopped intervening in the foreign exchange market, Ben Holt, Blades’ CFO, was concerned that the value of the Thai baht would continue to decline indefinitely. Since Blades generates net inflow in Thai baht, this would seriously affect the company’s profit margin. Furthermore, one of the reasons Blades had expanded into Thailand was to appease the company’s shareholders. At last year’s annual shareholder meeting, they had demanded that senior management take action to improve the firm’s low profit margins. Expanding into Thailand had been Holt’s suggestion, and he is now afraid that his career might be at stake. For these reasons, Holt feels that the Asian crisis and its impact on Blades demand his serious attention. One of the factors Holt thinks he should consider is the issue of government intervention and how it could affect Blades in particular. Specifically, he wonders whether the decision to enter into a fixed agreement with Entertainment Products was a good idea under the circumstances. Another issue is how the future completion of the swap agreement initiated by the Thai government will affect Blades. To address these issues and to gain a little more understanding of the process of government intervention, Holt has prepared the following list of questions for you, Blades’ financial analyst, since he knows that you understand international financial management.

BLADES, INC. CASE: Assessment of Potential Arbitrage Opportunities
CASE STUDY FOR DISCUSSION 1b
Recall that Blades, a U.S. manufacturer of roller blades, has chosen Thailand as its primary export target for Speedos, Blades’ primary product. Moreover, Blades’ primary customer in Thailand, Entertainment Products, has committed itself to purchase 180,000 Speedos annually for the next 3 years at a fixed price denominated in baht, Thailand’s currency. Because of quality and cost considerations, Blades also imports some of the rubber and plastic components needed to manufacture Speedos from Thailand. Lately, Thailand has experienced weak economic growth and political uncertainty. As investors lost confidence in the Thai baht as a result of the political uncertainty, they withdrew their funds from the country. This resulted in an excess supply of baht for sale over the demand for baht in the foreign exchange market, which put downward pressure on the baht’s value. As foreign investors continued to withdraw their funds from Thailand, the baht’s value continued to deteriorate. Since Blades has net cash flows in baht resulting from its exports to Thailand, deterioration in the baht’s value will affect the company negatively. Ben Holt, Blades’ CFO, would like to ensure that the spot and forward rates Blades’ bank has quoted are reasonable. If the exchange rate quotes are reasonable, then arbitrage will not be possible. If the quotations are not appropriate, however, arbitrage may be possible. Under these conditions, Holt would like Blades to use some form of arbitrage to take advantage of possible mispricing in the foreign exchange market. Although Blades is not an arbitrageur, Holt believes that arbitrage opportunities could offset the negative impact resulting from the baht’s depreciation, which would otherwise seriously affect Blades’ profit margins Holt has identified three arbitrage opportunities as profitable and would like to know which one of them is the most profitable. Thus, he has asked you, Blades’ financial analyst, to prepare an analysis of the arbitrage opportunities he has identified. This would allow Holt to assess the profitability of arbitrage opportunities very quickly.

E-ACTIVITIES FOR DISCUSSION 2
e-Activities

1. Go to The Economist’s Website, located at http://www.economist.com/content/big-mac-index, and explore the Big Mac Index. Focus on what it tells you about PPP and the relative prices between Thailand and the U.S. in particular. Be prepared to discuss.

Select a Fortune 500 company that is of interest to you. Use the Internet and the following links to research the manner in which translation exposure could affect the company in question.

 Yahoo! Finance, located at http://finance.yahoo.com/

 X-Rates, located at http://www.x-rates.com/table/?from=thb

 CoinMill.com, located at http://coinmill.com/THB_USD.html

 “Industry Analysis: Recreation” article, located at http://www.valueline.com/Stocks/Industries/Industry_Analysis__Recreation.aspx

Focus on the location of most of the company’s foreign subsidiaries and the major currencies that the company must use on a daily basis. Consider the key tools that are available for the selected company to minimize translation exposure when the company repatriates earnings at the end of the fiscal year. Be prepared to discuss.

Homework is Completed By:

Writer Writer Name Amount Client Comments & Rating
Instant Homework Helper

ONLINE

Instant Homework Helper

$36

She helped me in last minute in a very reasonable price. She is a lifesaver, I got A+ grade in my homework, I will surely hire her again for my next assignments, Thumbs Up!

Order & Get This Solution Within 3 Hours in $25/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 3 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 6 Hours in $20/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 6 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 12 Hours in $15/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 12 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

6 writers have sent their proposals to do this homework:

Best Coursework Help
Professional Accountant
Coursework Assignment Help
Assignment Hub
Instant Assignments
Homework Guru
Writer Writer Name Offer Chat
Best Coursework Help

ONLINE

Best Coursework Help

I will be delighted to work on your project. As an experienced writer, I can provide you top quality, well researched, concise and error-free work within your provided deadline at very reasonable prices.

$35 Chat With Writer
Professional Accountant

ONLINE

Professional Accountant

I am an experienced researcher here with master education. After reading your posting, I feel, you need an expert research writer to complete your project.Thank You

$37 Chat With Writer
Coursework Assignment Help

ONLINE

Coursework Assignment Help

I have worked on wide variety of research papers including; Analytical research paper, Argumentative research paper, Interpretative research, experimental research etc.

$29 Chat With Writer
Assignment Hub

ONLINE

Assignment Hub

This project is my strength and I can fulfill your requirements properly within your given deadline. I always give plagiarism-free work to my clients at very competitive prices.

$29 Chat With Writer
Instant Assignments

ONLINE

Instant Assignments

I will be delighted to work on your project. As an experienced writer, I can provide you top quality, well researched, concise and error-free work within your provided deadline at very reasonable prices.

$36 Chat With Writer
Homework Guru

ONLINE

Homework Guru

I can assist you in plagiarism free writing as I have already done several related projects of writing. I have a master qualification with 5 years’ experience in; Essay Writing, Case Study Writing, Report Writing.

$50 Chat With Writer

Let our expert academic writers to help you in achieving a+ grades in your homework, assignment, quiz or exam.

Similar Homework Questions

Excel 2016 module 10 sam project 1a - Range of tolerance graphing activity answer key - Converting complex numbers to polar form - Group 4 project presentation - Salem press encyclopedia january 2016 - Reading summary - What three groups use ratio analysis - Mgt351 week 4 - Uq blackboard grade centre - Career counseling code of ethics - Acids bases ph and buffers lab - Car seat extension strap repco - Redox titration of fe2+ with kmno4 - Chiquita brands international case study solution - A process with no beginning work in process - Genesis 15 1 6 niv - Video streaming industry five forces analysis - Commedia dell arte history timeline - What is math 1010 - The boarding house analysis - Assignment - Veronica mars a recent graduate of bell's accounting program - Harley davidson key success factors - Flannery o connor writing short stories essay - Which global enterprises employee used to work for the los angeles police department? - Microbiology lab report gram stain - Knight engines excalibur engine parts - African American Studies - Dance mat typing bbc - Response - 5.2a - Section 5- 15-17,19 - The research paper should be based on a topic discussed in the course. - The sweet hereafter chapter 1 summary - Shadow health chest pain assessment - Fronditha care thornbury thornbury vic - Cite your sources using apa format week 5 assignment - Major assignment 3 math 144 - Chapter summary - Balloons and static electricity simulation answers - NEED IN 15 HOURS or LESS - Biology, - Cellular transport test review answers - Based on surveys of managers the society's moral - Collective noun for a group of actors - Brothers penny and sparrow chords - Police organization and management issues for the next decade - Accounting - simple task - Tilburg university academic calendar - John deere industrial revolution - Blue collar brilliance they say i say - Wind water stone octavio paz - 39118 calle bonita green valley ca 91390 - Managing change is an integral part of - Ikea differentiation strategy - EDUC-6263 - Geography Assignment - What is the effect of foreshadowing - Bmach on my statement - The Body Rituals of the Nacirema - Cos nx sin mx - Billets the wiggles city national grove of anaheim august 2 - Break-even point example questions and answers - Justine petersen housing and reinvestment corporation - Brand Personality Presentation - Ethical Hacking - Excel crash course exam answers - Nbn fixed wireless signal strength test - The first 90 days chapter summary - Eng 122 week 1 discussion 1 - 3.11 5 practice questions testout - Ieee std 43 2013 - Zat you santa claus - Marketing Campaign 3-5 pages - Norton rose fulbright dx - Project deliverable 3 database and data warehousing design - Cu hcl net ionic equation - Emic 2 text to speech - Unsw undergraduate handbook pdf - CIS Assignment - Dr jaime dy liacco clinic address - Eight days in a corset siri hustvedt pdf - The first required step in the accounting cycle is - Polygenic inheritance and epistasis - Gc 2 worksheet 6 patterson answers - Separation and purification of organic compounds experiment - Cathedral of the sea plot summary - Wave energy advantages and disadvantages - Igcse chemistry atoms elements and compounds questions - Temperate forest biome climate graph - Jean watson theory of caring powerpoint - Registered training organisations victoria - Stem and leaf plot medium answers - If the absolute pressure of a gas is 550.280 kpa - The patterson operation case study - Two way intercom project - Geology and tectonic setting of sequoia – kings canyon national park - Contract process flow chart - Peruvian flame rump tarantula care sheet - Pharmacy written exam sample questions