Sooter Ltd. sold $4.2 million Australian dollars (AUD) worth of goods to a Japanese company, Ashi Trading.

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Sooter Ltd. sold $4.2 million Australian dollars (AUD) worth of goods to a Japanese company, Ashi Trading. Ashi has to make payment in 60 days and its bank has provide a forward rate quote of Japanese Yen, JPY90.6369 = 1AUD.

If the spot rate on the date of payment is JPY86.1566=1AUD, will Ashi save or lose by hedging with a forward contract, and by how much?

Related Book For answer-question

Modern Advanced Accounting in Canada

ISBN: 978-1259087554

8th edition

Authors: Hilton Murray, Herauf Darrell

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Posted Date: Oct 16, 2023 01:50 AM

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Sooter Ltd. sold $4.2 million Australian dollars (AUD) worth of goods to a Japanese company, Ashi Trading.

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Lets analyze the situation 1 Spot Rate The spot rate on the date of payment is JPY861566 ... View the full answer

Modern Advanced Accounting in Canada

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