Question 10Effects of Tariffs Assume a simple world in which the United States exports soft drinks and beer to France and imports wine from France. If the United States imposes large tariffs on the French wine, explain the likely impact on the values of the U.S. beverage firms, U.S. wine producers, the French beverage firms, and the French wine producers.Question 13Exchange Rate Effects on Tradea. Explain why a stronger dollar could enlarge the U.S. balance-of-trade deficit. Explain why a weaker dollar could affect the U.S. balance-of-trade deficit.b. It is sometimes suggested that a floating exchange rate will adjust to reduce or eliminate any current account deficit. Explain why this adjustment would occur.c. Why does the exchange rate not always adjust to a current account deficit?Question 18Foreign Exchange You just came back from Canada, where the Canadian dollar was worth $.70. You still have C$200 from your trip and could exchange them for dollars at the airport, but the airport foreign exchange desk will only buy them for $.60. Next week, you will be going to Mexico and will need pesos. The airport foreign exchange desk will sell you pesos for $.10 per peso. You met a tourist at the airport who is from Mexico and is on his way to Canada. He is willing to buy your C$200 for 1,300 pesos. Should you accept the offer or cash the Canadian dollars in at the airport? Explain.Question 24Interpreting Exchange Rate Quotations Today you notice the following exchange rate quotations:(a) $1 14 3.00 Argentine pesos and (b) 1 Argentine peso 14 .50 Canadian dollars. You need to purchase 100,000 Canadian dollars with U.S. dollars. How many U.S. dollars will you need for your purchase?

QUESTION:
Sharon, Fiona and Michael are the shareholders of a company called SFM Pty Ltd. Sharon is
the managing director and Michael is a director. Sharon would like her son in law Tasi to
become a director of the company. Her son in law is 27 but lives in Fiji. He left Australia 18
months ago to live in Fiji as his company which sold properties to investors ran into some
“financial difficulties.” The regulator, ASIC is preparing to take legal action against him
Fiona and Michael are not keen on another director being appointed.
The company runs a fashion design business. Due to the downturn in the retail and
discretionary spending retail sector and competition from overseas brands the company is
suffering from very tight cash flows. The Bank will not lend any more money to the company
and the shareholders will not take up more shares in the company. Various experts and
economists have indicated that the retail sector will take at least 5 years to recover. Sharon
wants to fire staff and not reduce her salary. She feels that Michael does not do enough work
in the company and he should reduce his salary. Michael is aware that many migrants to
Australia would like to buy a business to assist them in getting their permanent residency status
in Australia. One such person has expressed an interest in buying the business.
You are the accountant for the company.
Michael is not happy about the above comes to you with the following queries:

1. How can we prevent Tasi being appointed as a director?

2. Is the company insolvent and if so what are the consequences for me?
Required:
Please answer Michael’s queries.

QUESTION:
Sharon, Fiona and Michael are the shareholders of a company called SFM Pty Ltd. Sharon is
the managing director and Michael is a director. Sharon would like her son in law Tasi to
become a director of the company. Her son in law is 27 but lives in Fiji. He left Australia 18
months ago to live in Fiji as his company which sold properties to investors ran into some
“financial difficulties.” The regulator, ASIC is preparing to take legal action against him
Fiona and Michael are not keen on another director being appointed.
The company runs a fashion design business. Due to the downturn in the retail and
discretionary spending retail sector and competition from overseas brands the company is
suffering from very tight cash flows. The Bank will not lend any more money to the company
and the shareholders will not take up more shares in the company. Various experts and
economists have indicated that the retail sector will take at least 5 years to recover. Sharon
wants to fire staff and not reduce her salary. She feels that Michael does not do enough work
in the company and he should reduce his salary. Michael is aware that many migrants to
Australia would like to buy a business to assist them in getting their permanent residency status
in Australia. One such person has expressed an interest in buying the business.
You are the accountant for the company.
Michael is not happy about the above comes to you with the following queries:

1. How can we prevent Tasi being appointed as a director?

2. Is the company insolvent and if so what are the consequences for me?
Required:
Please answer Michael’s queries.