A company exports commodity X to Canada, if the total purchase price(including VAT 17%) is RMB 247500, the rate of expense standard is 5%, the rate of export tax rebate is 14%, the total freight is USD245.00, the company insures against all risks for 110% of invoice value, the premium rate is 1.5%, the profit is 10% based on purchase price. Rate of foreign exchange: USD1.00=RMB6.50 what are FOB price, CFR price and CIF price respectively?
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Caculation: A company exports commodity X to Canada, if the total purchase price(including VAT 17%) is RMB 247500, the rate of expense standard is 5%, the rate of export tax rebate is 14%, the total freight is USD245.00, the company insures against all risks for 110% of invoice value, the premium rate is 1.5%, the profit is 10% based on purchase price. Rate of foreign exchange: USD1.00=RMB6.50 what are FOB price, CFR price and CIF price respectively?
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- Caculation: A company exports commodity X to Canada, if the total purchase price(including VAT 17%) is RMB 247500, the rate of expense standard is 5%, the rate of export tax rebate is 14%, the total freight is USD245.00, the company insures against all risks for 110% of invoice value, the premium rate is 1.5%, the profit is 10% based on purchase price. Rate of foreign exchange: USD1.00=RMB6.50 what are FOB price, CFR price and CIF price respectively?A company offered to sell goods at “USD2000 per M/T CIF Toronto with all risks for 110% of the value” . The importer requested a revised quote for FOB Ningbo, The freight for Ningbo to Toronto was USD 50 per M/T, and the premium rate was 1%, to get the same export revenue,what are FOB price and CFR price?a) The Business and Financial Times currently has given the following quotes between ¢:$ as:Spot = 0.7200 – 0.72501 month forward = 0.0014 – 0.0016 premium1 month forward rate = 0.7186 – 0.7234 i. Your company currently has GH¢32,500 and wishes to import goods from America. Assuming you are the financial advisor of such company, what will be your advice? ii. Should they import now or a month’s time, assuming prices will remain constant? b) Agency problem is pervasive and exists in practically every organization whether a business, church, club, or government. Organizations try to solve it by instituting measures but no organization can remedy it completely.How would you analyze this statement within the context of a limited liability company and what are the possible remedies to this problem?
- You have 1000000 CHF Assume the following exchange rates are quoted: Bank of America CHF/USD 1.56 Barclays Bank GBP/USD 1.71 Deutsche Bank GBP/CHF 1.13 Is triangular arbitrage possible? Describe the procedure step by step. What's the profit?Your firm is a U.S.-based supplier of agricultural parts. A European customer just made a €50,000 purchase on trade credit terms of net 30 days. At the time of the sale, the exchange rate was EUR/USD 1.19. The projected exchange rate in 30 days is EUR/USD 1.21. Calculate the value of accounts receivable on the date of the sale. a. $41,322.31 b. $42,016.81 C. $59,500.00 d. $60,500.00A US dollar costs 1.30 Canadian dollar (CAD), but the same dollar can be purchased for 25.0 Mexican peso (MXN). If the MXN/CAD exchange rate is quoted as 18.0, there is an opportunity for triangular arbitrage. Starting from a dollar, the arbitrager will first buy (CAD MXN) with the dollar to obtain blanks and explain your answer." % of riskless arbitrage profit for each round. Fill in
- IF 2c Your Canadian company processes raw sugar for sale in the United States, and thefirm has just received a container of raw material from the UK. You have an invoicethat asks you to pay £20,000 in 30 days. The current exchange rate is $1.75/£. c. If you could lock into a forward rate today of $1.85/£ for delivery in 30 days, whatshould you do?What is the rate of return on a USD500,000 investment when the price level in the US is USD19,440, the price level in the UK is GBP13,784 and the spot rate is USD138/GBP? O a 2.145% O b. 2511% Oc 2.198% O d. 3.052%The 6-month interest rate in the US is 12.25% p.a. The 6-month interest rate in Canada is 15.25% p.a. The spot rate is US$0.8203/Canadian$ and the 6-month forward rate is US$0.8113/Canadian$. For a transaction size of US$700,000, how can an investor take advantage of the situation without taking undue risks? Ignore transaction costs and income taxes
- You observe the following quotations: USD/NZD = 1.3705 – 40 USD/GBP = 0.7130 – 60 GBP/NZD = 1.9340 – 80 Starting with £10,000, you can make one-trip arbitrage profits (rounded to the pound) of: 78 GBP 104 GBP No arbitrage profit is possible. 5 GBP 36 GBPKP Production Sdn Bhd (KPSB) is expecting to receive US$10,000,000 in export sales from United States in 90 days. The current spot rate is RM3.0380/USS and the 90-day forward rate is RM3.0120/USS. The 90-day interest in Malaysia is 3.5% per annum whereas it is 5% per annum in the United States. required i) Identify KPSB's transaction exposure associated with this receivable. ii) Calculate the ringgit revenue if KPSB is to forward cover this transaction iii) Compute the ringgit revenue if the company hedges in the money market for this transaction. iv) Advise KPSB whether to hedge in the forward market or money market. JustifyThe spot rate between Canada and the U.S. is Can$1.2398/$, while the one-year forward rate is Can$1.2397/$. The risk-free rate in Canada is 4.31 percent and risk-free rate in the United States is 2.60 percent. How much in profit can you earn on $6,500 utilizing covered interest arbitrage? Multiple Choice $89.36 $110.60 $97.73 $124.43 $111.70 part B, The annual inflation rate in the U.S is expected to be 2.68 percent and the annual inflation rate in Poland is expected to be 4.21 percent. The current spot rate between the zloty and dollar is Z4.0992/$. Assuming relative purchasing power parity holds, what will the exchange rate be in four years? Multiple Choice Z4.2902/$ Z4.3559/$ Z3.8540/$ Z3.9139/$ Z4.2256/$