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Gogo Bhd in Malaysia has agreed to buy 10,000 cameras from Titan Ltd in the United States for USD 150 each at today's spot rate.
Gogo Bhd in Malaysia has agreed to buy 10,000 cameras from Titan Ltd in the United States for USD 150 each at today's spot rate. Gogo Bhd agrees to buy 5,000 more tripod stands for USD 200 each over the next two months on the same day. Steven, the firm's financial manager, has noted the following current spot and forward rates: USD/RM 0.2469 RM/USD 4.05 4.09 4.01 spot 30-day forward 60-day forward 90-day forward 0.2445 0.2494 0.2500 4.00 Required: (i) Calculate the price of the cameras in RM if purchased at today's spot rate using the direct quote method. (4 marks) (ii) Calculate the cost of the second 5,000 tripod stands in RM using an indirect quote method if payment is made in 60 days and the spot rate at the time is equal to today's 60-day forward rate. (4 marks)
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