Question

A U.S. manufacturer sells an item for $1,000 to a French buyer and quotes the payment...

A U.S. manufacturer sells an item for $1,000 to a French buyer and quotes the payment to be in U.S. dollars this year. What is the current exchange rate (2/20/19), and what was the exchange rate last year (2/20/18) on the same day? How does this transcation affect the U.S seller and the French buyer? (Illustrate by creating a chart) what would the buyer pay and the seller receive in both cases?

0 0
Add a comment Improve this question Transcribed image text
Know the answer?
Add Answer to:
A U.S. manufacturer sells an item for $1,000 to a French buyer and quotes the payment...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Krystal.  Krystal is a​ U.S.-based company that​ manufactures, sells, and installs water purification equipment.

    Krystal.  Krystal is a U.S.-based company that manufactures, sells, and installs water purification equipment. On April 11, the company sold a system to the City of Nagasaki, Japan, for installation in Nagasaki's famous Glover Gardens (where Puccini's Madame Butterfly waited for the return of Lt. Pinkerton). The sale was priced in yen at ¥29,000,000, with payment due in three months. The exchange rate and interest rate data are shown in the popup window: Note that the interest rate differentials vary...

  • Exchange Rates The chart below shows the exchange rate between the U.S. dollar and the Mexican...

    Exchange Rates The chart below shows the exchange rate between the U.S. dollar and the Mexican peso in 2015 and 2016. In these questions we’ll focus on changes in 2015.  Note that the chart shows the exchange rate in terms of pesos per dollar.   Suppose a meal at a restaurant in Mexico City cost 90 pesos in 2015.  Read approximate figures from the chart for the exchange rate in January 2015 and January 2016, and use those figures to answer the following...

  • a US. company, sold equipment to a French company for Euro 100 million. Payment is due...

    a US. company, sold equipment to a French company for Euro 100 million. Payment is due in 90 days. Answer the following questions (24-26) using the information below: Current spot rate 90 day Forward rate $.95/E $.98/E Interest rate in U.S Interest rate in France 6% PA. 896 PA. Call option Strike price Premium S.97/E 3% Put option Strike price Premium $.97/E 496 24. If a firm uses a money market hedge, how much money should the firm get in...

  • 1. Suppose the initial price of a French bond is €850, the coupon income is €70, the end of perio...

    1. Suppose the initial price of a French bond is €850, the coupon income is €70, the end of period bond price is €1,000, and the franc devalues by 6% against the dollar during the period. What was the bond's total dollar return during the period? 2. Suppose an investor buys a Taiwanese bond with a face value of NT20,000, which is priced at NT$19,500 and bears a coupon of NT$1,700. At the end of the year, the investor sells...

  • A 20-year, $1,000 par value bond has a 7% annual payment coupon. The bond currently sells...

    A 20-year, $1,000 par value bond has a 7% annual payment coupon. The bond currently sells for $840. If the yield to maturity remains at the current rate, what will the price be 10 years from now? Your answer should be between 770.15 and 1,026.90, rounded to 2 decimal places, with no special characters.

  • NEW R 3. A Canadian company pays $300,000 consulting fee to a U.S. consulting company in...

    NEW R 3. A Canadian company pays $300,000 consulting fee to a U.S. consulting company in San Diego. Which of the following account in the U.S. balance of payment statement will be affected by the cross-border transaction? A) Current account B) Capital account C) Foreign reserve account D) Unilateral payment account 6. Newstar, Inc., based in the U.S., exports products to a German firm and will receive E100,000 in six months. On February 1, the spot rate of the euro...

  • Question Assume the exchange rate for the Mexican Peso is falling relative to the U.S. dollar....

    Question Assume the exchange rate for the Mexican Peso is falling relative to the U.S. dollar. An American 17 company will incur losses from this falling exchange rate if the company is making: Not yet answered Select one: Marked out of 1。a. Credit purchases from Mexican companies at prices stated in Mexican Pesos. Flag question b. Credit purchases from Mexican companies at prices stated in U.S, dollars. c.Credit sales to Mexican companies at prices stated in U.S. dollars. O d....

  • You are a manufacturer of Item X. Your Suggested Unit Retail Price is $180. You are offering the following incentives (O...

    You are a manufacturer of Item X. Your Suggested Unit Retail Price is $180. You are offering the following incentives (Off List Price) to the retail trade sector to encourage retailers to sell your product. The retailer can qualify for: Incentives                                                Discounts (%)                           Requirement to Qualify Promotional Allowances                                5                                      Provide Off-shelf Display Trade Discount                                               30                                      Be a retailer          Cooperative Advertising                                 25 of qualified                                                                         Retailer Ad expenditure   Pay for Advertising Copy Quantity Discount                                           10                                      Buy...

  • Please answer question 2 and 3. Q2 (33 points) A manufacturer produces and sells bottled drinks....

    Please answer question 2 and 3. Q2 (33 points) A manufacturer produces and sells bottled drinks. Their production capacity is 570 units daily, but their sales at the moment are estimated at 400 units per day. The manufacturer produces Mondays through Fridays. The variable cost for production is $1.5. The manufacturer incurs about $250 labor cost per production order for setups. Accounting estimates annual holding costs as $0.30 per unit. a) Determine the optimal production quantity for the bottled drinks....

  • Module 9 – Foreign Exchange Rate Risk Homework Exercise Part 1 1. Suppose that the EUR:USD...

    Module 9 – Foreign Exchange Rate Risk Homework Exercise Part 1 1. Suppose that the EUR:USD is trading at 1.3342; the GBP:JPY is trading at 67.7600; and the EUR:GBP is trading at 0.8165. What should the USD:JPY rate be? 2. If a price index for US goods stands at 118.93 and the same price index for European goods (i.e., computed from the same consumption basket) stands at 183.34; what is the fair (under the theory of PPP) spot exchange rate...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT