The following 2 questions are based on the homework questions below.*I want to calculate the real mark up for the bid using the attached info.*How do I substantiate the put option being the best choice for the hedging options?A) Was Peter’s use of the spot rate on April 1st for the determination of the bid in US dollars correct? Provide a well reasoned argument for why or why not. If yes what is the best way to secure the expected revenue? If not, what should they have used for the exchange rate in the bid? B) Based on your analysis of the bid, what is the real mark up on the bid? (Hint: this has nothing to do with the exchange rate, but everything to do with the cost accounting!) Analyze each of the hedging alternatives financially and strategically. Make your recommendation for either hedging or not, and, if hedging, recommend the best hedging alternative. Base your recommendation on the financial analysis of various alternatives in the case, financial analysis of the company, and projection of exchange rates.
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