JJ Fashion Wholesalers Ltd, an Indian clothing manufacturer, has a contract to purchase cotton from an Australian supplier to the value of AUD $700,000. How much will this order cost in Indian rupees (INR) if the bank has quoted JJ Fashion an AUD/INR exchange rate of 54.07 – 54.98? (b) Would JJ Fashion Wholesalers Ltd prefer the AUD/INR exchange rate to be higher or lower? Why?
JJ Fashion Wholesalers Ltd, an Indian clothing manufacturer, has a contract to purchase cotton from an Australian supplier to the value of AUD $700,000. How much will this order cost in Indian rupees (INR) if the bank has quoted JJ Fashion an AUD/INR exchange rate of 54.07 – 54.98? (b) Would JJ Fashion Wholesalers Ltd prefer the AUD/INR exchange rate to be higher or lower? Why?
Chapter3: International Financial Markets
Section: Chapter Questions
Problem 3IEE
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(a) JJ Fashion Wholesalers Ltd, an Indian clothing manufacturer, has a contract to purchase cotton from an Australian supplier to the value of AUD $700,000. How much will this order cost in Indian rupees (INR) if the bank has quoted JJ Fashion an AUD/INR exchange rate of 54.07 – 54.98?
(b) Would JJ Fashion Wholesalers Ltd prefer the AUD/INR exchange rate to be higher or lower? Why?
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