Ford purchased electric motors from Nidec (a Japanese company) and was billed 200 million payable in three
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Question:
Ford purchased electric motors from Nidec (a Japanese company) and was billed ¥200 million payable in three months. Two companies agree to share the currency risks. In the Price Adjustment Clause, the neutral zone is ¥115.38/$ - ¥129.42/$, the base rate is ¥122.4/$ and both parties will share the currency risk beyond a neutral zone.
How much each party has to pay/receive if the exchange rate is ¥111.42/$?
a. Ford pays ¥200 million; Nidec receives $1.634 million.
b. Ford pays $1.634 million; Nidec receives ¥200 million.
c. Ford pays ¥196.55 million; Nidec receives $1.764 million.
d. Ford pays $1.764 million; Nidec received ¥196.55 million.
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
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