QUESTION 3 (4) Xon Ltd has recenthy deaided to open a material outlet based in South Africa. After careful research of the current market and its fluctuations in price, the company has declded to parchase its stook from China and import the goods directly to South Africa. The Chirese supplier deals in US currency (US dolars) and has provided Xon Lld with the following payment details: Total cost of arder is Seo0000. The total cost is made up of an upfront payment (deposit) on the date of arder of $ 200 000, a shipment cost of $ 260000 due in three months' time and the final balance of $ 200 000 must be pad in six montho' time according to the deal agreement. The accountants of xon Ltd were quoted the following spot and forward exchange rates by the local bank: Spot rate (today) 12.46so -manth forward rate 12.5980 6-month forward rate 12.7280 You aze required to answer the following questions based on the informmation provided above by Xon Ltd: 3.1 Determine the rand equvalents of the payments to be made by Xon Ltd for the dothing order from Chins, assuming Xon Ltd undertakes forward cover on all forpign currency obigations. (11 3.2 At the date of the order (today, the foreign supplier states that it is willing to grant a 1% discount on the balance of $ 200000 due in 6 months' time, if this payment is brought forward to the date of shipment (3 months' timel. Determine whether Xon Ltd should make use of the discount, again assuming they take out forward cover on all foreign currency obligations. Further assume that Xon Ltd is in a net borrowing position and is able to borrow at 12% per annum from a local bank. (17) 3.3 In the question above, there were two relevant techniques for Xon Ltd to hedge against transaction exposure. Narme and briefly describe any other FOUR methods Xon Ltd could consider for the same purpose. (12) QUESTION 3 (4) Xon Ltd has recenthy deaided to open a material outlet based in South Africa. After careful research of the current market and its fluctuations in price, the company has declded to parchase its stook from China and import the goods directly to South Africa. The Chirese supplier deals in US currency (US dolars) and has provided Xon Lld with the following payment details: Total cost of arder is Seo0000. The total cost is made up of an upfront payment (deposit) on the date of arder of $ 200 000, a shipment cost of $ 260000 due in three months' time and the final balance of $ 200 000 must be pad in six montho' time according to the deal agreement. The accountants of xon Ltd were quoted the following spot and forward exchange rates by the local bank: Spot rate (today) 12.46so -manth forward rate 12.5980 6-month forward rate 12.7280 You aze required to answer the following questions based on the informmation provided above by Xon Ltd: 3.1 Determine the rand equvalents of the payments to be made by Xon Ltd for the dothing order from Chins, assuming Xon Ltd undertakes forward cover on all forpign currency obigations. (11 3.2 At the date of the order (today, the foreign supplier states that it is willing to grant a 1% discount on the balance of $ 200000 due in 6 months' time, if this payment is brought forward to the date of shipment (3 months' timel. Determine whether Xon Ltd should make use of the discount, again assuming they take out forward cover on all foreign currency obligations. Further assume that Xon Ltd is in a net borrowing position and is able to borrow at 12% per annum from a local bank. (17) 3.3 In the question above, there were two relevant techniques for Xon Ltd to hedge against transaction exposure. Narme and briefly describe any other FOUR methods Xon Ltd could consider for the same purpose. (12)