12. Problem 19.13 (Spot and Forward Rates)

Arvin Australian Imports has agreed to purchase 15,000 cases of Australian wine for 5 million Australian dollars at today's spot rate. The firm's financial manager, Sarah Vintnor, has noted the following current spot and forward rates:

	U.S. Dollar/Australian Dollar	Australian Dollar/U.S. Dollar
Spot	0.7959	1.2564
30-day forward	0.7954	1.2572
90-day forward	0.7942	1.2591
180-day forward	0.7927	1.2615

On the same day, Vintnor agrees to purchase 15,000 more cases of wine in 3 months at the same price of 5 million Australian dollars.

1. What is the price of the wine in U.S. dollars if it is purchased at today's spot rate? Round your answer to the nearest cent.

   $

2. What is the cost in U.S. dollars of the second 15,000 cases if payment is made in 90 days and the spot rate at that time equals today's 90-day forward rate? Round your answer to the nearest cent.

   $

3. If the exchange rate for the Australian dollar is 1.22 to $1 in 90 days, how much will Vintnor have to pay for the wine (in U.S. dollars)? Round your answer to the nearest cent.

   $