Question

Cnooc, a Chinese public-sector company, has made a bid to purchase Canada’s Nexen, a big oil company, for C$ 15.1 billion in June 2012. Treat this as an initial investment made by Cnooc in this two-year, Canadian project. If it has purchased Nexen in September 2012, how many Yuan does Cnooc save on its initial investment because of the change in the CNY to CAD exchange rate from 6.3698 Yuan/C$ in June 2012 to 6.3465 Yuan/C$ in September, 2012?

Answer 1

Initial investment made=   C$ 15.1 billion  
exchange rates on June 2012 1C$=   6.3698   yuan
if paid on June 2012, amount in yuan will be 15.1 billion*6.3698=   96.18398   billion yuan
      
exchange rate on September 2012, 1C$=   6.3465   Yuan
amount paid in yuan = 15.1 billion*6.3465=   95.83215   billion yuan
      
Yuan saved = 96.18398-95.83215=   0.35183   billion yuan
      
So Cnooc save 0.35183 billion yuan on its initial investment