A U.S. company that imports laptop computers from Japan knows that in 30 days it must...

Transcribed Image Text:

A U.S. company that imports laptop computers from Japan knows that in 30 days it must pay in yen to a Japanese supplier when a shipment arrives. The company will pay the Japanese supplier x150,000 for each computer, and the current dollar/yen spot exchange rate is $1 = x110. The importer can sell the computers the day they arrive for $1,600 each. However, the importer will not have the funds to pay the Japanese supplier until the computers have been sold. The importer enters into a 30-day forward exchange transaction with a foreign exchange dealer at $1 = x105. What is the profit or loss per computer if the exchange rate after 30 days is $1 = x90? Show your work. A U.S. company that imports laptop computers from Japan knows that in 30 days it must pay in yen to a Japanese supplier when a shipment arrives. The company will pay the Japanese supplier x150,000 for each computer, and the current dollar/yen spot exchange rate is $1 = x110. The importer can sell the computers the day they arrive for $1,600 each. However, the importer will not have the funds to pay the Japanese supplier until the computers have been sold. The importer enters into a 30-day forward exchange transaction with a foreign exchange dealer at $1 = x105. What is the profit or loss per computer if the exchange rate after 30 days is $1 = x90? Show your work.

Answer rating: 100% (QA)

To calculate the profit or loss per computer we need to consider the costs revenues and the effect o... View the full answer