P&G India. Procter and Gamble's affiliate in India, P&G India, procuros 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 o longer. P&G India wishes to hedge an 8.5 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 4.72% fee. Using the exchange rate and interest rate data in the popup window. E, compare alternate ways below that P&G India might deal with its foreign exchange exposure. Assume a 360-day financial year. a. How much in Indian rupees will P&G India pay in 160 days without a hedge if the expected spot rate in 180 days is assumed to be 42.52523/Rs? 2.3963/Rs? 2.5871/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? 8. What do you recommend? 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 42.52523/Rs? Rs (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 2.3963/Rs? Rs (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 42.5671/Rs? Spot rate 2.52523/RS 180-day forward rale 42.3963/Rs Expected spot, 100 days 42.5871/Rs 180-day Indian rupee investing rate B.31% 180-day Japanese yen investing rate 3.31% Currency agent's exchange rate fee 4.72% P&G India's cost of capital 11.23% Click on the icon located on the top right comer of the data table in order to copy its contents into a spreadsheet Rs(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(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? Rs (Round to the nearest whole number.) Print Done d. How much in Indian rupees will P&G India pay in 180 days with a currency agent hedge? Rs_(Round to the nearest whole number.) P&G India. Procter and Gamble's affiliate in India, P&G India, procuros 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 o longer. P&G India wishes to hedge an 8.5 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 4.72% fee. Using the exchange rate and interest rate data in the popup window. E, compare alternate ways below that P&G India might deal with its foreign exchange exposure. Assume a 360-day financial year. a. How much in Indian rupees will P&G India pay in 160 days without a hedge if the expected spot rate in 180 days is assumed to be 42.52523/Rs? 2.3963/Rs? 2.5871/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? 8. What do you recommend? 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 42.52523/Rs? Rs (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 2.3963/Rs? Rs (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 42.5671/Rs? Spot rate 2.52523/RS 180-day forward rale 42.3963/Rs Expected spot, 100 days 42.5871/Rs 180-day Indian rupee investing rate B.31% 180-day Japanese yen investing rate 3.31% Currency agent's exchange rate fee 4.72% P&G India's cost of capital 11.23% Click on the icon located on the top right comer of the data table in order to copy its contents into a spreadsheet Rs(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(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? Rs (Round to the nearest whole number.) Print Done d. How much in Indian rupees will P&G India pay in 180 days with a currency agent hedge? Rs_(Round to the nearest whole number.)
