Boisjoly Watch Imports has agreed to purchase 15,000 Swiss watches for 1 million francs at today's spot rate. The firm's financial manager, James Desreumaux, has noted the following current spot and forward rates: U.S. Dollar / Franc Franc / U.S. Dollar Spot 1.6590 0.6028 30-day forward 1.6540 0.6046 90-day forward 1.6460 0.6075 180-day forward 1.6400 0.6098 On the same day, Desreumaux agrees to purchase 15,000 more watches in 3 months at the same price of 1 million francs. What is the cost of the watches, in U.S. dollars, if purchased at today's spot rate?
Boisjoly Watch Imports has agreed to purchase 15,000 Swiss watches for 1 million francs at today's spot rate. The firm's financial manager, James Desreumaux, has noted the following current spot and forward rates: U.S. Dollar / Franc Franc / U.S. Dollar Spot 1.6590 0.6028 30-day forward 1.6540 0.6046 90-day forward 1.6460 0.6075 180-day forward 1.6400 0.6098 On the same day, Desreumaux agrees to purchase 15,000 more watches in 3 months at the same price of 1 million francs. What is the cost of the watches, in U.S. dollars, if purchased at today's spot rate?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter27: Multinational Financial Management
Section: Chapter Questions
Problem 11P: Boisjoly Watch Imports has agreed to purchase 15,000 Swiss watches for 1 million francs at today’s...
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Boisjoly Watch Imports has agreed to purchase 15,000 Swiss watches for 1 million francs at today's spot rate. The firm's |
|||||||
U.S. Dollar / Franc | Franc / U.S. Dollar | ||||||
Spot | 1.6590 | 0.6028 | |||||
30-day forward | 1.6540 | 0.6046 | |||||
90-day forward | 1.6460 | 0.6075 | |||||
180-day forward | 1.6400 | 0.6098 | |||||
On the same day, Desreumaux agrees to purchase 15,000 more watches in 3 months at the same price of 1 million francs. | |||||||
What is the cost of the watches, in U.S. dollars, if purchased at today's spot rate? | |||||||
Cost of Watches | = | Swiss Francs | / | Franc/U.S | Dollar |
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