Arnold International Inc. (Al), headquartered in California, just bought electronic equipment from a supplier in Japan for JPY 100,000,000 with the payment due in three months. Al's WACC is 12% per annum. If Al hedges in the money market, what is the value of its payables in three months? (Assume the company uses the working capital for money market funds). Current Spot Rate 3-month U.S. Borrowing Rate 8% Per annum 3-month Japan Borrowing WACC Rate 5% Per annum 12% per annum 3-month U.S. 3-month Japan Deposit Rate Deposit Rate 4% Per annum 1.6% Per annum JPY118/USD USD 868,538.66 USD 818,280.37 USD 870,704.59 USD 820,430.79 USD 869,403.74 Question 11 4 points A firm with floating-rate debt that expects interest rates to rise may Engage in a swap agreement to pay fixed rate and receive fixed rate Engage in a swap agreement to pay floating rate and receive fixed rate Engage in a swap agreement to pay floating rate and receive floating rate Engage in a swap agreement to pay fixed-rate interest and receive floating rate interest Not engage in an interest rate swap agreement Question 12 4 points Save Answe Oracle Corporation, a US firm, just signed a contract to provide computer services to Fujitsu of Japan over a 5- year period and receive payments in yen. To manage the operating exposure, Oracle has taken out a 5-year yen-denominated loan. This technique of managing operating exposure is known as: A Currency swap A parallel loan Currency switching Currency matching A back-to-back loan