Boeing sold an airplane to Air India for Rs. 1000M. Boeing will receive payments in Indian Rupee.

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Boeing sold an airplane to Air India for Rs. 1000M. Boeing will receive payments in Indian Rupee. The spot exchange rate is $1 = Rs. 20. The payment will be received 3 months from today.

a. If the exchange rate for Indian Rupees is Rs. 25/$ after 3 months what is the potential transaction gain or loss for Boeing?

b. If the exchange rate is Rs. 18/$ after 3 months what is the potential transaction gain or loss for Boeing?

c. How would you expect Boeing to hedge this transaction?

Related Book For answer-question

International Accounting

ISBN: 978-1260466539

5th edition

Authors: Timothy Doupnik, Mark Finn, Giorgio Gotti, Hector Perera

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Posted Date: Jun 10, 2023 12:02 AM

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Boeing sold an airplane to Air India for Rs. 1000M. Boeing will receive payments in Indian Rupee.

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a To calculate the potential transaction gain or loss for Boeing we need to compare the exchange rat... View the full answer

International Accounting

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