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CTP · Question #410
(Topic 5) A company agrees to pay ¥10,000,000 for a shipment from Japan. At the time the purchase order is placed the exchange rate is ¥168/US$. At the time of payment the exchange rate is ¥163/US$…
The correct answer is B. An increase of $1,825. See the full explanation below for the reasoning.
Question
- (Topic 5)
A company agrees to pay ¥10,000,000 for a shipment from Japan. At the time the purchase order is placed the exchange rate is ¥168/US$. At the time of payment the exchange rate is ¥163/US$. What is the net effect on the dollar cost of the shipment if the transaction has NOT been hedged?
Options
- AAn increase of $5,000
- BAn increase of $1,825
- CA decrease of $5,000
- DA decrease of $1,825
How the community answered
(13 responses)- A8% (1)
- B69% (9)
- C8% (1)
- D15% (2)
Community Discussion
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