Accra Chemicals is a large conglomerate based in Ghana which specializes in the manufacturing of chemical...
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Accra Chemicals is a large conglomerate based in Ghana which specializes in the manufacturing of chemical derivatives. In order to manage its working capital needs and to take advantage of lower interest rates in the US compared with Ghana, it took out a US$25 million one-year loan in December 2021 with an interest rate of 11.2% when the USD/Cedi was at 6.15. The loan must be repaid in December 2022. The USD/Cedi rate is now 12.55. Compute the profit or loss of foreign exchange on this transaction. (10 marks) Accra Chemicals is a large conglomerate based in Ghana which specializes in the manufacturing of chemical derivatives. In order to manage its working capital needs and to take advantage of lower interest rates in the US compared with Ghana, it took out a US$25 million one-year loan in December 2021 with an interest rate of 11.2% when the USD/Cedi was at 6.15. The loan must be repaid in December 2022. The USD/Cedi rate is now 12.55. Compute the profit or loss of foreign exchange on this transaction. (10 marks)
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Related Book For
Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey
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