1 One point of concern for you is that there is a trade-off between the higher interest rates in Thailand and the delayed conversion of baht into pounds. Explain what this means.

As a financial analyst for Blades plc you are reasonably satisfied with Blades’ current setup of exporting ‘Speedos’ (roller blades) to Thailand. Due to the unique arrangement with Blades’ primary customer in Thailand, forecasting the revenue to be generated there is a relatively easy task. Specifically, your customer has agreed to purchase 180 000 pairs of Speedos annually, for a period of three years, at a price of THB4594 (THB ¼ Thai baht) per pair. The current direct quotation of the pound–baht exchange rate is £0.016.