1. The efficiency gains resulting from a just-in-time inventory management system will allow a firm to reduce its level of inventories permanently by $303,000. What is the most the firm should be willing to pay for installing the system?
2. A company holding Australian dollars wishes to purchase UK Pounds. The current AUD/GBP (Australian Dollar/Swiss Franc) exchange rate is .4728. The rate on the 10 year bond (U.K.) is 1.79%. The rate on the 10 year AUD bond is 2.75%. What is the value of a 10 year forward?
3. Discuss the purpose of financial reporting and the potential problems that might emerge due to mishandling/misreporting financial data.