Question: PLEASE SOLVE AND PRESENT COMPLETE SOLUTION On January 1, 2020, ABC Corporation sold its goods to a Japanese corporation. The sales was invoiced at JYP600,000.

PLEASE SOLVE AND PRESENT COMPLETE SOLUTION

On January 1, 2020, ABC Corporation sold its goods to a Japanese corporation. The sales was invoiced at JYP600,000. The collection will be one month from now. ABC would like to hedge this foreign exchange transaction by entering into an option contract which costs P500. Relevant exchange rates (PHP-JYP) are as follows: Buying Rate te Selling Rate Jan. 1, 2020 Spot Rate Do not 0.512 0.517 Jan. 1, 2020 30-day Forward Rate ACEL 0.515 0.521 Jan. 1, 2020 60-day Forward Rate 0.517 0.523 Jan. 31, 2020 Spot Rate 0.513 0.519 Jan. 31, 2020 30-day Forward Rate 0.514 0.520 Jan. 31, 2020 60-day Forward Rate 0.515 0.521 Mar. 2, 2020 Spot Rate 0.510 0.514 Mar. 2, 2020 30-day Forward Rate 0.508 Do not dist 0.512 Mar. 2, 2020 60-day Forward Rate 0.505 0.511 How much is the net cash inflow from the collection of the receivable, conversion of the JYP (at the ideal rate) and the purchase of the option

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