Question
The current spot rate is $0.3000/P. You are selling a product and you charge domestic customers $150,000.00. How would you share the FX risk with
The current spot rate is $0.3000/P. You are selling a product and you charge domestic customers $150,000.00. How would you share the FX risk with your Mexican customers if you decided to do two currencies on your invoices? How much will you receive if the spot rate ends up at $0.3030/P?
(a) Bill them for $75,000 and P 250,000. You receive $150,750
(b) Bill them for $75,000 and P 22,500. You receive $149,257
(c) Bill them for $150,000.00 and P 22,500. You receive $45,450
(d) Bill them for $75,000 and P 22,725. You receive $150,750
The answer is (a) Bill them for $75,000 and P 250,000. You receive $150,750, need help with the math.
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