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DeMagistris Fashion Company in New York City imports jewelry from Acuna in Argentina. Payment is in Argentine pesos. They have a risk-sharing agreement to share
DeMagistris Fashion Company in New York City imports jewelry from Acuna in Argentina. Payment is in Argentine pesos. They have a risk-sharing agreement to share the difference equally if the peso/dollar exchange rate falls outside of Ps3.7/$ and Ps4.3/$. DeMagistris contracts to import jewelry worth 14,000,000 pesos. The spot rate is currently Ps4.0/$. What will be the dollar cost of imports if:
the peso falls to Ps4.9/$?
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