Amo Tech, an Indian Company signs a contract to buy 1000 computers from a French retailer Martin Bro. for 50 per computer on the condition that payment will be made at the time of delivery. Thus, Amo Tech expects that when they accept delivery of the computers, they will be obligated to pay the amount agreed upon of 50000, in the exchange rate of Rupee at the time of the sale. However, it took a few months for delivery. In the meantime, due to unforeseen circumstances, the value of the Indian Rupee depreciated.

a. Explain the role of foreign exchange risk management.

b. Discuss the impact of depreciation of rupees on the buyer and seller.