On October 1, aMultinational Corporation(MNC)received an order from a Japanese customer for 2,500,000 Yen to be paid upon receipt of the goods, scheduled for December1.

The rates for $1 US are as follows:

Exchange Rates for $1 forYenSpot rate,

October 183 Forward rate,

December 182 Spot rate,

December 181

a)Calculate what MNCwould receive from the Japanese customer in US dollars using the spot rate at the time of the order.

b)Calculate what MNCwould receive from the Japanese customer in US dollars using the spot rate at the time of payment.

c)Calculate the amount that MNCexpects to receive on December1 if MNCs policy is to hedge foreign currency transactions.

d)Briefly discuss implications.