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Caribbean Flour has purchased wheat from a company in the UK, with payment due 9 months from today. The payment due is 160,000. The Canadian
Caribbean Flour has purchased wheat from a company in the UK, with payment due 9 months from today. The payment due is 160,000. The Canadian dollar and British pound rate is currently 1.5758 and the nine-month C$/ forward rate is 1.6953. If Caribbean Flour hedges their foreign currency risk with a forward contract advise the company:
a. How much they will they have to pay in six months in Canadian dollars? (Round the final answer to the nearest whole dollar.)
b. How much would they have to pay today?
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