Question
The company has submitted a bid to build 25 Wind Turbines for the Japanese government for 18,625,000 JPY each. The company wants to hedge the
The company has submitted a bid to build 25 Wind Turbines for the Japanese government for 18,625,000 JPY each. The company wants to hedge the JPY/USD exchange rate to ensure it doesnt have reduced profits due the currency fluctuations. The current rate is 1 USD = 119 JPY and the contract is scheduled to be awarded in 6 months. 2 pts each
- What is the total value in USD for the contract at the current exchange rate? _____________________
- What would be the value in USD for the contract if the JPY depreciates to 125 JPY to buy one USD? _____________________
- What would be the value in USD for the contract if the JPY appreciated to 100 JPY to buy one USD?
______________________
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Gordon Roberts, Hamdi Driss
8th Canadian Edition
01259270114, 9781259270116
