Arvin Australian Imports has agreed to purchase 15,000 cases of Australian wine for 6 million Australian dollars at today's spot rate. The firm's financial manager, Sarah Vintnor, has noted the following current spot and forward rates: U.S. Dollar/ Australian Dollar Australian Dollar/ U.S. Dollar Spot 0.7285 1.3727 30-day forward 0.7287 1.3723 90-day forward 0.7294 1.3710 180-day forward 0.7306 1.3687 On the same day, Vintnor agrees to purchase 15,000 more cases of wine in 3 months at the same price of 6 million Australian dollars. a. What is the price of the wine in U.S. dollars if it is purchased at today's spot rate? Round your answer to the nearest cent. $ ___ b. What is the cost in U.S. dollars of the second 15,000 cases if payment is made in 90 days and the spot rate at that time equals today's 90-day forward rate? Round your answer to the nearest cent. $ ___ c. If the exchange rate for the Australian dollar is 1.31 to $1 in 90 days, how much will Vintnor have to pay for the wine (in U.S. dollars)? Round your answer to the nearest cent. $ ___
Arvin Australian Imports has agreed to purchase 15,000 cases of Australian wine for 6 million Australian dollars at today's spot rate. The firm's
| U.S. Dollar/ Australian Dollar |
Australian Dollar/ U.S. Dollar |
|
| Spot | 0.7285 | 1.3727 |
| 30-day forward | 0.7287 | 1.3723 |
| 90-day forward | 0.7294 | 1.3710 |
| 180-day forward | 0.7306 | 1.3687 |
On the same day, Vintnor agrees to purchase 15,000 more cases of wine in 3 months at the same price of 6 million Australian dollars.
a. What is the price of the wine in U.S. dollars if it is purchased at today's spot rate? Round your answer to the nearest cent.
$ ___
b. What is the cost in U.S. dollars of the second 15,000 cases if payment is made in 90 days and the spot rate at that time equals today's 90-day forward rate? Round your answer to the nearest cent.
$ ___
c. If the exchange rate for the Australian dollar is 1.31 to $1 in 90 days, how much will Vintnor have to pay for the wine (in U.S. dollars)? Round your answer to the nearest cent.
$ ___
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