Let’s suppose you (USA dealer) imported one Earth Equipment machine from German dealer on March 1, 2017 at € 300,000 each, payable in 30 days. The exchange rate on March 1, 2017 was 1.16 US$/€. Then you sold the machine in the US market at US$350,000 in cash on March 29, 2017. On April 1, 2017, you paid to Italian car dealer at the exchange rate of 1.19 US$/€. What was profit or loss from this business in terms of US$? (Please assume all costs are included in price.) A)-4500 B)-9200 C)-10200 D)-7000

Q: Voltac Corporation (a U.S.-based company) has the following import/export transactions denominated…

A: Inventory in pesos=Inventory bought×100-% sold=112,000×100-80%=22,400

Q: An investor has $10m to invest and has the following options: 1) depositing it in a US bank account…

A: Exchange rate: It is the value of a currency that is exchanged with another currency.

Q: Spindler, Inc. (a U.S.-based company), imports surfboards from a supplier in Brazil and sells them…

A: Acquired surfboards on September 1, 2020 -300 Surfboards @ BRL 1,600 = BRL 480,000. Exchange rate…

Q: Spindler, Inc. (a U.S.-based company), imports surfboards from a supplier in Brazil and sells them…

A: Foreign exchange fluctuation loss/gain:  Foreign exchange fluctuation loss/gain is occurred if…

Q: Voltac Corporation (a US-based company) has the following import/export transactions denominated in…

A: The prices at which you may convert one currency for another are known as foreign exchange rates.…

Q: What is the degree of pass through by Phillips NV on their DVD players?

A: Exchange pass-through refers to the way in which changes in foreign exchange rates affect the prices…

Q: XYZ Corporation imports goods from China with a total invoice value of $10,000,000. The exchange…

A: Foreign exchange rates represent the relative value of one currency in terms of the another. These…

Q: Study Abroad: Paris to Moscow. On your summer study abroad program in Europe you stay an extra two…

A: A currency exchange rate is the rate at which one currency can be exchanged for another currency. It…

Q: A U.S. firm buys merchandise from a Portuguese company at a cost of EUR 250,000.  The merchandise…

A: The United State firm is exposed to foreign exchange fluctuation because it will pay in dollars in…

Q: er annum in the U.S. and 5.7% per annum in the U.K. Assume that you can borrow £1,000,000 or its…

A: In monetary terms, the exchange rate (also known as the foreign exchange rate, forex rate, or rate)…

Q: Use the following information on the U.S. dollar value of the pound sterling to answer Forward Rate…

A: b.  No effect

Q: Currently, the USD/MXN rate is 19.7800 and the six-month forward exchange rate is 20.1700. The…

A:

Q: Global Distributors Inc. plans to make a payment of €1,500,000 to a supplier in Europe in 3 months.…

A: To calculate the savings from entering into the forward rate agreement, we need to compare the…

Q: pa e rate fluctuations on reported income in 2020? pindler acquired the surfboards on December 1,…

A: Exchange rate gain (loss) is the difference between when rate when the invoice was raised and when…

Q: Voltac Corporation (a U.S.-based company) has the following import/export transactions denominated…

A: The exchange rate arises when a transaction takes place between two countries. It is the value of…

Q: uro 15 per bottle. Relevant exchange rates are as follows: Date Spot Rate Forward Rate (to January…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: Voltac Corporation (a U.S.-based company) has the following import/export transactions denominated…

A: A. Inventory  = 110,000 pesos × 0.19 × 40%(as 60% is sold) = $8360

Q: Voltac Corporation (a U.S.-based company) has the following import/export transactions denominated…

A: Inventory includes all the items, merchandise, and raw materials that are used by the business…

Q: You are a U.S. importer and just placed an order of antiques worth £100,000 from a U.K supplier. You…

A: A foreign exchange payment is hedged through an option contract. Total cost of purchase needs to be…

Q: Suppose your company imports computer motherboards from Singapore. The exchange rate is $1.4923 per…

A: The value of one currency in relation to the value of another currency is known as the exchange…

Q: Suppose your company imports computer motherboards from Singapore. The exchange rate is $1.4651 per…

A: The exchange rate is the rate at which one currency is exchanged for another currency. It is the…

Q: Ganado Corporation recently received a payment for one of the consignments it exported to Europe, It…

A: A cross currency rate is the  rate which is used and computed so that a rate can be determined…

Q: Voltac Corporation (a U.S. company located in Charlotte, North Carolina) has the following…

A: As you posted multiple sub parts questions we are answering first three sub parts only kindly repost…

Q: Maloney Corporation has decided to speculate on the foreign exchange market, and has entered into a…

A: Introduction:- This question involves the preparation of journal entries to record a forward…

Q: Voltac Corporation (a U.S. company located in Charlotte, North Carolina) has the following…

A: Cost of goods sold is the costs incurred by a business on raw material, direct labor and…

Q: A US based investor plans to invest $44,400 in Russia, where the interest rate is 6.65%. If the…

A: While investing in other country, first exchange rate shall be applied and then interest rate of…

Q: Suppose that Baltimore Machinery sold a drilling machine to a Swiss firm and gave the Swiss client a…

A: The implied exchange rate is the exchange rate that is implied by the prices of two related assets…

Q: Spindler, Incorporated (a U.S.-based company), imports surfboards from a supplier in Brazil and…

A: The rate at which one currency can be exchanged for another is known as the exchange rate. It shows…

Q: On January 31, 2019 the exchange rate between the US dollar and the euro was 1.14 USD/EUR. At the…

A:

Q: Use the following information on the U.S. dollar value of the euro to answer the question. Forward…

A: Introduction: Foreign currency transaction gain or loss is the change in the foreign currency…

Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.