6. 9. Exchange-rate risk [LO 21.3] Suppose your company imports computer motherboards from Singapore. The exchange rate

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6. 9.

Exchange-rate risk [LO 21.3] Suppose your company imports computer motherboards from Singapore. The exchange rate is given in Figure 21.1. You have just placed an order for 30 000 motherboards at a cost to you of 218.50 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for

$265 each. Calculate your profit if the exchange rate goes up or down by 10 per cent over the next 90 days. What is the break-even exchange rate? What percentage rise or fall does this represent in terms of the Singapore dollar versus the Australian dollar?

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