Question: Suppose Company A , a U . S . exporter, sold a consignment of antique American muscle - cars to a Japanese customer at a
Suppose Company A a US exporter, sold a consignment of antique American musclecars to a Japanese customer at a price of million yen, when the exchange rate was yen per dollar. In order to close the sale, Company A agreed to make the bill payable in yen, thus agreeing to take some exchange rate risk for the transaction. The terms were net months. If the yen fell against the dollar such that one dollar would buy yen when the invoice was paid, what dollar amount would Company A actually receive after it exchanged yen for US dollars?
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