5. Louisville Co. is a U. S. firm considering a project in Austria which it has an initial cash outlay of $6 million. Louisville will accept the project only if it can satisfy its required rate of return of 15 percent. The project would definitely generate 2 million euros in one year from sales to a large corporate customer in Austria. In addition, it also expects to receive 4 million euros in one year from sales to other minor customers in Austria. Louisville's best guess is that the euro’s spot rate will be $1.26 in one year. Today, the spot rate of the euro is $1.40, while the one-year forward rate of the euro is $1.34. If Louisville accepts the project, it would hedge the receivables resulting from sales to the large corporate customer, and none of the expected receivables due to expected sales to other minor customers.

Mountain mouse makes freeze-dried meals for hikers. one of mountain mouse's biggest customers is a sporting goods superstore. every 66 days, mountain mouse checks the inventory level at the superstore and places an order to restock the meals. these meals are delivered by ups in 55 days. average demand during the reorder period and order lead time is 8585 meals, and the standard deviation of demand during this same time period is about 1919 meals.calculate the restocking level for mountain mouse. assume that the superstore wants a 95\% service level. what happens to the restocking level if the superstore wants a higher level of service-say, 99]%? the restocking level for the 95% service level is 117 mealssuppose there are 25 meals in the superstore when mountain mouse checks inventory levels. how many meals should be ordered, assuming a 95% service level?