Accounting Inc. has ordered imports from Uruguay, and its imports are invoiced in Uruguayan pesos. The dollar value of the payables (based on today's exchange rate) from its imports during this year is $20 million. It has no international sales.

 

Geography Inc. has ordered imports from Nigeria, and its imports are invoiced in Nigerian Naira. The dollar value of the payables from its imports during this year is $20 million. Geography also ordered imports from Chile and these imports are denominated in Chilean pesos.  The dollar value of these payables is $8 million. Geography has no international sales. 

 

Sociology Ltd. ordered imports from Zambia, and its imports are invoiced in Zambian kwacha. The dollar value of the payables (based on today's exchange rate) from its imports during this year is $35 million. In addition, Sociology exports to Ethiopia and its exports are denominated in Ethiopian Birr. The dollar value of the receivables (based on today's exchange rate) from its exports during this year is $10 million.

 

Maths Inc. ordered imports from Turkey, and these imports are invoiced in Turkish lira. The dollar value of the payables (based on today's exchange rate) from its imports during this year is $22 million.

 

Based on this information, which firm is exposed to the most exchange rate risk? Explain

Answer rating: 100% (QA)

Sociology Ltd is exposed to the most exchange rate risk among the f... View the full answer