Question
In: Finance
An Australian importer has received goods from India and will pay 2 million Indian rupees (INR)...
An Australian importer has received goods from India and will pay 2 million Indian rupees (INR) in one year. The importer expects that the value of the INR will appreciate by 20.57% against the Australian dollar from today’s spot rate of 0.2527 in one year. How much Australian dollar the importer will make a loss due to appreciation of INR after one year? (enter the whole number with no sign or symbol)
Solutions
Expert Solution
Australian dollars at spot rate = Spot rate * Payment amount
= 0.2527 * 2,000,000
= Aus $ 505,400
Loss due to appreciation of INR = 505,400 * 20.57%
= Aus $ 103,960.78 Answer
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