1) Studio of Sally added $2,300 to retained earnings from sales of $66,800 in last year. Company had dividends of $1,000, costs of $52,300 and interest paid of $900. The tax rate was 34 percent. Find out the amount of depreciation expense?
i) $4,200
ii) $6,800
iii) $8,600
iv) $9,500
v) $14,500
2) Describe the hedging techniques given; futures/forwards/options and swaps. What are they and when must they be used?
By using derivatives to hedge risk, how would you make a decision whether to utilize futures contracts, forward agreements, or interest rate swaps? As all three markets exist, explain why do some firms select diverse methods?
Requirements
Min Pages: 2
Max Pages: 3