International Financial Management
14th Edition
ISBN: 9780357130698
Author: Madura
Publisher: Cengage
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A firm sells the same material with two separate payment plans.1. According to the 1st payment plan, the payment period is 12 months, each monthly payment is 10 837 000 dollars, and an interim payment of 12 million dollars is required at the end of the 6th month.2. In the 2nd payment plan, the payment period is 18 months, each monthly payment is 7 965 000 dollars and an interim payment of 36 million dollars is required at the end of the 12th month. Annual nominal interest rate for both options is 60%. Which payment plan would you recommend? In payments, discrete compound interest is applied.
Give typing answer with explanation and conclusion
1. You enter an NDF to buy UYU (Uruguayan Peso) for $.0363/UYU. The contract size is UYU50,000,000 and the contract matures in six months.
If the spot rate is $.0381/UYU in six months, will you owe the bank money, or will the bank owe you money? How much in total?
If the spot rate is $.0346/UYU in six months, will you owe the bank money, or will the bank owe you money? How much in total?
A firm sells the same material with two separate payment plans.1. According to the 1st payment plan, the payment period is 12 months, each monthly payment is 10.837.000 TL, and an interim payment of 12 million TL is required at the end of the 6th month.2. In the 2nd payment plan, the payment period is 18 months, each monthly payment is 7.965.000 TL and an interim payment of 36 million TL is required at the end of the 12th month. Annual nominal interest rate for both options is 60%. Which payment plan would you recommend? In payments, discrete compound interest is applied.
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