The US-based parent firm of K9 Australia sells 500,000 units of backpacks to its Australian unit on a monthly basis, with the transfer price valued at AUD100/unit. The transfer price is increased to AUD110 at the same time that credit terms are extended from the current 30 days to 60 days.

The new credit terms apply only to new sales.

What is the net impact on cash flows for the first 90 days?

Select one:

a. Shift AUD 45 million from the Australian unit to the US unit

b. Shift AUD 45 million from the US unit to the Australian unit

c. Shift AUD 35 million from the Australian unit to the US unit

d. Shift AUD 35 million from the US unit to the Australian unit

e. Shift AUD 30 million from the US unit to the Australian unit

You want to prepare for your future travels to Japan by exchanging Australian Dollars (AUD) for Japanese Yen (JPY). The bank quotes bidask rates of JPY104.20-JPY135/USD and USD1.3001USD1.4086/AUD.

What is the bank's direct asking price of yen per Australian dollar (JPY/AUD)?

Select one:

a. 190.16

b. 0.01

c. 95.84

d. 103.84

e. None of the above.

In an alternative universe, the Australian Dollar (AUD) is a fixed-rate currency. The Australian Reserve Bank decided to revalue the Australian Dollar by 17% relative to the previous rate of USD1.99/AUD in the year before.

By how much has the US Dollar (USD) appreciated or depreciated relative to the Australian Dollar (in percentage terms)?

Select one:

a. -14.5299 %

b. -17.0000 %

c. -117.0000 %

d. 85.4701 %

e. 25.4361 %

The current price for a futures contract that matures in 283 days is CAD1.46/EUR. The size for a futures contract on EUR is EUR 125,000 and the futures price has risen to CAD1.466/EUR by the close of trading. If you own 7 futures contracts, how much can you gain under marking to market?

Select one:

a. 5250

b. 875000

c. 1277500

d. 4127

e. 1282750