assume that Gilligan Ltd. enters into a contract to buy inventory from an overseas supplier. On 1 February 2023, it acquires the material at a cost of US$500,000 payable in two months' time. The exchange rate at the time is A$1=US$1.15. The actual debt considered to trade payable and is the primary financial instrument. The exchange rate on 1 April 2023, is A$1=US$1.09.

REQUIRED

A As the debt is payable in two months' time describe the potential risk to Gilligan ltd.

B Assume that McCoy Ltd. is concerned about [possible adverse exchange rate movements, what action could the company take?