Assuming the exchange rate does not change

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Reference no: EM131893777

Onni, a Finnish national, has just signed an agreement to purchase $209,000 of specialty retail products from the US to be sold in his stores in Finland. The products are to be shipped within the next 20 days and payment is required in 60 days. The current exchange rate is EUR/USD 1.0861.

a. Assuming the exchange rate does not change, what amount of EUR will Onni need to make the payment?

b. If the exchange rate changes to EUR/USD 1.1132, what amount of ERU will Onni need to make the payment? Will Onni have an exchange gain or loss? If yes, then how much (in Euros)?

c. If the exchange rate changes to EUR/USD 1.0428, what amount of EUR will Onni need to make the payment? Will Onni have an exchange gain or loss? If yes, then how much (in Euros)?

Reference no: EM131893777

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