Acapana Case Study

Information about the Case Report

1. Case: Acpana Business Systems Inc.: Effect of Currency Exposure on Revenue

2. Due date: This report is due at the beginning of the class on July 7, 2015.

3. Your case report MUST be typed, and must be handed in as a paper copy in class. Hand-written reports are not accepted.

4. Feel free to make assumptions; justify your assumptions.

5. You report should include the following analysis:

* Frame the issue. What is Brenzel Concerned by the current exchange rate fluctuation?

* Which vehicles does Acpana have at its disposal for hedging? Assume Acpana will need to transfer $200,000 US dollars to Canadian dollars on a regular basis, calculate the impact of these different hedging strategies against a naked position at:

a. 1 Cdn$=1 US$;

b. 1 Cdn$=0.90 US$;

c. 1 Cdn$=1.10 US$.

* Should Schenkel recommend Acpana hedge its position in Canadian dollars? Why or why not? If you think he should recommend a hedge, which vehicle should he recommend?

* Does the Economist Business Unit’s forecast that the Canadian dollar will finish the year at parity to the US dollar affect your decision to hedge?

* Summarize your conclusions.

* Frame the issue:

* Acpana Business Systems Inc., a Canadian software development and backup-as-a service provider, was founded in 2003 by Jamie Brenzel, Rob Schenkel and Tim Jewell. Acpana’s success was based on utilizing its core platform, KineticD to deliver a superior solution that is accessible, secure, affordable and simple. However, Brenzel, the company’s CEO, concerned that the recent volatility and appreciation of the Canadian dollar would affect the company’s revenue and growth. As a result, he tasked Schenkel, the company’s VP of operations, to research different hedging opportunities and give recommendations whether the unsure effect of the fluctuating Canadian dollars on company’s revenues can be minified.

* 1. Which vehicles does Acpana have at its...