invoice is for $1,24,000.Presently the exchange rate is 5.70 French francs to the $. If the French franc were to strengthen by 5% by the end of 90 days what would be the transactions gain or loss in French francs? If it were to weaken by 5%, what would happen?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter22: International Financial Management
Section: Chapter Questions
Problem 8P
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Q.6.

 

A Fleur Co, has shipped goods to an American importer under a letter of credit arrangement, which calls for payment. The invoice is for $1,24,000.Presently the exchange rate is 5.70 French francs to the $. If the French franc were to strengthen by 5% by the end of 90 days what would be the transactions gain or loss in French francs? If it were to weaken by 5%, what would happen?

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