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Acuns Leather Goods, DeMagistris Fashion Company, based in New York City, imports leather coats from Acua Leather Goods, a reliable and langlime suppier, based in
Acuns Leather Goods, DeMagistris Fashion Company, based in New York City, imports leather coats from Acua Leather Goods, a reliable and langlime suppier, based in Buenos Ares, Argentina. Paymont is in Augontine pesos. When the peso lost its parity with the U.S dotlar in January 2002, it collapsod in value to Ps 4 . 0.5 by October 2002 . The outlook was for a furthet decine in the pesa's value Since both DeMagistris and Acuria wanted to continue their longtime relationship, they agreed on a risk-sharing arrangement As long as the spot rate on the date of an invoice is between Ps3. 5 .5. and Ps4, 55. DeMagistris will pay based on the spot rate. If the exchange rate falls outsido this range, they will share the diterence equally with Acuria Leather Goods. The rek-shating agreement will last for ax months, at which time the exchange rate limits wit be recvaluated DoMagistris contracts to Import leather coats from Acuria fot Ps8.500,000 or 32,125,000 at the current spot rate of Pg. 015 during the next six months. 3. If the exchange tate changes immediates to P.5.0/5, what wit be the dollar cost of six months of imports to DeMacistris? b. At Ps6.015, what will be the pess export soles of Acuria Leather Goors to DefMagstris Fashion Company? a. If the exchange rate changes immediately to Pse. 0.15, what will be the dollar cost of shx monthis of imports to DeMagiatita? (Round to the nearest dollar)
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