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Case
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Reference no. F163
Published by: Stanford Business School
Originally published in: 2002
Version: 8 April 2002
Length: 8 pages
Data source: Published sources

Abstract

Dozier Industries was a US manufacturer of electronic security systems. In 1994, it received a large order from the United Kingdom, which stipulated payment in British pounds. The company received a deposit, with the balance expected to be paid in 90 days. The contract provided a slim profit margin, which could be easily eliminated by an unfavorable change in exchange rates. The chief financial officer had to decide whether to accept the foreign exchange risk or to hedge the exposure.
Size:
USD6,427,000 revenues (1993)
Other setting(s):
1994

About

Abstract

Dozier Industries was a US manufacturer of electronic security systems. In 1994, it received a large order from the United Kingdom, which stipulated payment in British pounds. The company received a deposit, with the balance expected to be paid in 90 days. The contract provided a slim profit margin, which could be easily eliminated by an unfavorable change in exchange rates. The chief financial officer had to decide whether to accept the foreign exchange risk or to hedge the exposure.

Settings

Size:
USD6,427,000 revenues (1993)
Other setting(s):
1994

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