User Account

All Pages

How much will vintnor have to pay for the wine

Assignment Help Accounting Basics
Reference no: EM132682934

SPOT AND FORWARD RATES Arvin Australian Imports has agreed to purchase 15,000 cases of Australian wine for 4 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                                        0.7930                                       1.2610

30-day forward                            0.7927                                         1.2615

90-day forward                               0.7921                                         1.2625

180-day forward                                0.7911                                           1.2640

On the same day, Vintnor agrees to purchase 15,000 more cases of wine in 3 months at the same price of 4 million Australian dollars.

Question a. What is the price of the wine in U.S. dollars if it is purchased at today's spot rate?

Question 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?

Question c. If the exchange rate for the Australian dollar is 1.20 to $1 in 90 days, how much will Vintnor have to pay for the wine (in U.S. dollars)?

Reference no: EM132682934

Questions Cloud

Create next year budget : Create next year's budget based on what it would look like if upper management accepted your recommendations. Prepare next year's budget
How will recommendation affect food cost : Consider doing some outside research of current fast food chains, compare how they perform versus this operation to support your recommendations
How did management perform against what was budgeted : What are the strengths and weaknesses of operation per section based on variance analysis? How did management perform against what was budgeted?
Has company made a gain or a loss as a result : By the end of the month, it has unexpectedly dropped to $0.75. Has your company made a gain or a loss as a result, and by how much?
How much will vintnor have to pay for the wine : If the exchange rate for the Australian dollar is 1.20 to $1 in 90 days, how much will Vintnor have to pay for the wine (in U.S. dollars)?
What exchange rate between swedish kronas and pounds : The exchange rate between the dollar and the British pound was £1 = $1.29. What would be the exchange rate between Swedish kronas and pounds?
How does the vary from country to country : What are some of the common barriers to entry for a firm entering a new country for business? How does this vary from country to country?
How would you assess why employees are leaving : If you were the Vice President of Human Resources for a public agency, how would you assess why employees are leaving? After you choose your method.
Construct an argument drawing on one of the short stories : Construct an argument drawing on one (or two) of the short stories we have read by Irving, Hawthorne, or Poe. How does the writer exhibit social responsibility?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd