NextGen (Pty) Ltd is a company engaged in developing time management software, for the professional services market. Its main focus is electronic timesheet software for the legal and accountancy professions. At a recent strategic meeting it was decided that the company would market its products internationally, and as a result the company received its first order from Sage \& Scott Attorneys in the USA. Sage \& Scott ordered software to the value of $100000. It was agreed that the deal would be concluded on 15 November 2018, and that the invoice would be paid by 15 February 2019. The following information is applicable: - The spot Rand/US\$ exchange rate on 15 November 2018 is R14.10; - The expected inflation rate in South Africa for the foreseeable future is 6%; - The expected inflation rate in the USA for the foreseeable future is 2%; - Interest rates in South Africa for the foreseeable future are expected to be 9%; and - Interest rates in the USA for the foreseeable future are expected to be 4%. Power Products (Pty) Ltd is a South African based company that imports high quality electronic equipment. The company recently acquired electronics from a supplier in the USA for US $500 000 . The amount is payable in four months' time. In order to hedge against the weakening Rand, the financial director is considering taking out a forward exchange contract (FEC) with the bank. The bank is prepared to sell a four-month FEC at R14.96 per US\$ to the company. The spot rate for the US\$/R exchange rate today is R14.50. The expected inflation rate in South Africa for the foreseeable future is 6% per annum and the USA inflation rate for the foreseeable future is 2% per annum. Based on information provided in pre-seen 1, calculate how much NextGen will receive, in Rand value, if Sage \& Scott pays the full amount on 15 February 2019, per the agreement, by applying the Absolute Purchasing Power Parity theory. R................. (exclude the Rand sign and commas) Pre-seen 2: Based on the relative purchase power parity, determine what would the R/US\$ exchange rate be in 4 months' time. R.................. (Exclude the Rand sign and commas, use dots to separate Rands \& cents i.e. 12.50) Based on information provided in pre-seen 1, calculate how much NextGen will receive, in Rand value, if Sage \& Scott pays the full amount on 15 February 2019, per the agreement, by applying the Interest Rate Parity theory. R. (exclude the Rand sign and commas) 1427303.85 Pre-seen 2: Assuming that R/US\$ exchange rate be in 4 months' time is R14.80, calculate the profit or loss that Power Products (Pty) Ltd would make if they decided to enter into the Forward Exchange Contract (FEC). R................. (Exclude the Rand sign and commas, use dots to separate Rands \& cents i.e. 12.50) Based on information provided in pre-seen 1, calculate how much NextGen would receive, in Rand value, if Sage \& Scott paid the full amount on 15 November 2018. R...........( exclude the Rand sign and commas) NextGen (Pty) Ltd is a company engaged in developing time management software, for the professional services market. Its main focus is electronic timesheet software for the legal and accountancy professions. At a recent strategic meeting it was decided that the company would market its products internationally, and as a result the company received its first order from Sage \& Scott Attorneys in the USA. Sage \& Scott ordered software to the value of $100000. It was agreed that the deal would be concluded on 15 November 2018, and that the invoice would be paid by 15 February 2019. The following information is applicable: - The spot Rand/US\$ exchange rate on 15 November 2018 is R14.10; - The expected inflation rate in South Africa for the foreseeable future is 6%; - The expected inflation rate in the USA for the foreseeable future is 2%; - Interest rates in South Africa for the foreseeable future are expected to be 9%; and - Interest rates in the USA for the foreseeable future are expected to be 4%. Power Products (Pty) Ltd is a South African based company that imports high quality electronic equipment. The company recently acquired electronics from a supplier in the USA for US $500 000 . The amount is payable in four months' time. In order to hedge against the weakening Rand, the financial director is considering taking out a forward exchange contract (FEC) with the bank. The bank is prepared to sell a four-month FEC at R14.96 per US\$ to the company. The spot rate for the US\$/R exchange rate today is R14.50. The expected inflation rate in South Africa for the foreseeable future is 6% per annum and the USA inflation rate for the foreseeable future is 2% per annum. Based on information provided in pre-seen 1, calculate how much NextGen will receive, in Rand value, if Sage \& Scott pays the full amount on 15 February 2019, per the agreement, by applying the Absolute Purchasing Power Parity theory. R................. (exclude the Rand sign and commas) Pre-seen 2: Based on the relative purchase power parity, determine what would the R/US\$ exchange rate be in 4 months' time. R.................. (Exclude the Rand sign and commas, use dots to separate Rands \& cents i.e. 12.50) Based on information provided in pre-seen 1, calculate how much NextGen will receive, in Rand value, if Sage \& Scott pays the full amount on 15 February 2019, per the agreement, by applying the Interest Rate Parity theory. R. (exclude the Rand sign and commas) 1427303.85 Pre-seen 2: Assuming that R/US\$ exchange rate be in 4 months' time is R14.80, calculate the profit or loss that Power Products (Pty) Ltd would make if they decided to enter into the Forward Exchange Contract (FEC). R................. (Exclude the Rand sign and commas, use dots to separate Rands \& cents i.e. 12.50) Based on information provided in pre-seen 1, calculate how much NextGen would receive, in Rand value, if Sage \& Scott paid the full amount on 15 November 2018. R...........( exclude the Rand sign and commas)