FIN4604 RVF 1218 Adrian Tirado | 10/11/21 4:18 PM Homework: Mylab Chapter 10 Assignment Question 1, Problem 10-... Part 5 of 7 HW Score: 28.57%, 0.57 of 2 points Points: 0.57 of 1 Save P&G India. Procter and Gamble's affiliate in India, P&G India, procures much of its toiletries product line from a Japanese company. Because of the shortage of working capital in India, payment terms by Indian importers are typically 180 days or longer. P&G India wishes to hedge an 8.4 million Japanese yen payable. Although options are not available on the Indian rupee (Rs), forward rates are available against the yen. Additionally, a common practice in India is for companies like P&G India to work with a currency agent who will, in this case, lock in the current spot exchange rate in exchange for a 4.98% fee. Using the exchange rate and interest rate data in the popup Window, B. compare alternate ways below that P&G India might deal with its foreign exchange exposure. Assume a 360 day financial year, a. How much Indian rupees will P&G India pay in 180 days without a hedge If the expected spot rate in 180 days is assumed to be 42.52716/Rs? 2.3721/Rs? 2.6255/Rs? b. How much in Indian rupees will P&G India pay in 180 days with a forward market hedge? c. How much in Indian rupees will P&G India pay in 180 days with a money market hedge? d. How much in Indian rupees will P&G India pay in 180 days with a currency agent hedge? e. What do you recommend? - X Data Table a. How much in Indian rupees will P&G India pay in 180 days without a hedge if the expected spot rate in 180 days is assumed to be Y2.527 16/R Rs 3,323,889.27 (Round to the nearest whole number.) How much in Indian rupees will P&G India pay in 180 days without a hedge if the expected spot rate in 180 days is assumed to be 42.3721/Rs? Spot rate 2.52716/Rs 180-day forward rate V2.3721/RS Expected spot, 180 days V2.6255/Rs 180-day Indian rupee investing rate 7.76% 180-day Japanese yen investing rate 2.89% Currency agent's exchange rate fee 4.98% P&G India's cost of capital 12.04% Click on the con located on the top-right comer of the data fable in order to copy its contents into a spreadsheer. Rs 3,541,166.10 (Round to the nearest whole number.) How much in Indian rupees will P&G India pay in 180 days without a hedge if the expected spot rate in 180 days is assumed to be 2.6255/R37 P Rs 3,199,390.59 (Round to the nearest whole number.) b. How much in Indian rupees will P&G India pay in 180 days with a forward market hedge? Rs 3,541,166.10 (Round to the nearest whole number.) c. How much in Indian rupees will P&G India pay in 180 days with a money market hedge? Print Done Ro Rain in the nearest whole numer
