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- A foreign exchange dealer in Kigali Rwanda provides quotes for the spot and 3 month forward rates for the RFr against the dollar. Bid (RFr/U$$) ask (RFr/U$$) Spot 4.0040 4.0200 3-month forward 3.9690 3.9888 Required: a. What would you receive in dollars if you sell RFr 5 million at the spot rate? b. What would it cost in dollars to purchase RFr 20 million forward 3 month? When would you make payment?A U.S. consumer observes that a golf club costs $200. Currently in the spot market, 1 eurocan be exchanged for $1.1924. If purchasing power parity (PPP) holds, how many eurosshould you expect to pay for the same golf club in Europe?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?
- Suppose your company imports computer motherboards from Singapore. The exchange rate is $1.4353 per Singapore dollar. You have just placed an order for 38,260 motherboards at a cost to you of S148 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $118 each. What is the break-even exchange rate?Suppose your company imports computer motherboards from Singapore. The exchange rate is $1.3595 per Singapore dollar. You have just placed an order for 39328 motherboards at a cost to you of S146 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $118 each. Calculate your profit if the exchange rates goes down by 12.23% over the next 90 days. NOTE: Enter the number rounding to four DECIMALS. If your decimal answer is 0.034576A television set sells for 3,000 U.S. dollars. In the spot market, $1 5 109 Japaneseyen. If purchasing power parity holds, what should be the price (in yen) of the sametelevision set in Japan?
- You are trying to decide between two job offers. One consulting firm offers USD 150,000 per year to work in its New York Office. A second consulting firm wants you to work in its London office and offers you GBP 100,000 per year. The price levrels in the US and UK are USD 1,400 and GBP 1,000 respectively and the current exchange rate is USD 1.65/GBP. Which offer shoul1 vou take, and why? (Assume you are indifferent between working in the two cities if the purchasing power of your salary is the same). (a) youThe selling price of imported olive oil is $20 per case. Your cost is 15 Euros per case, and the exchange rate is currently 1.25, so it takes 1.25 Euros to buy $1. Your argest customer has ordered 15,000 cases of olive oil. How much is the pretax profit for this transaction? a. $120,000 b. $100,000 c. $90,000 d. $80,000 e. $60,000A company manufactures a product in the United States and sells it in England. The unit cost of manufacturing is $52. The current exchange rate (dollars per pound) is 1.213. The demand function, which indicates how many units the company can sell in England as a function of price (in pounds) is of the power type, with constant 27556733 and exponent -2.5. A) Develop a model for the company's profit (in dollars) as a function of the price it charges (in pounds). Then use a data table to find the profit-maximizing price to the nearest pound. Assume that the price ranges from £45 to £100 in increments of £1. Round your answer for the maximum profit to the nearest dollar and your answer for the best price to the nearest pound. 1. Maximum profit: $______ 2. Best price: £ ______