Magnetronics, Inc., a U.S. company, owes its Taiwanese supplier NT$205 million in three months. The company wishes
Question:
a. What is the U.S. dollar accounting entry for this payable?
b. What is the minimum U.S. dollar cost that Magnetronics can lock in for this payable? Describe the procedure it would use to get this price.
c. At what forward rate would interest rate parity hold given the interest rates?
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a Magnetronics will record a payable of US8173350 which is just NT205 converted at the spot rate of ...View the full answer
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