You own and operate a chain of electronic stores in Texas and you areconsidering expanding your inventory to include tablet work stations forsmall businesses. There is only one supplier of the brand of tablets youwould like to stock in your store, and that firm is located in Mexico. Youhave researched the current spot and forward rates between the U.S. andMexico, as indicated in Table-1TABLE-1U.S. Dollar/Peso<OR>Peso/U.S. Dollar123451.785130-DayForward1.705290-DayForward1.8051180-DayForward1.7555????Spot RateQuestions:Complete the Peso/ U.S. Dollar row in Table-1 and explain yourmethodology.If you agree to pay 2-million pesos for 100,000 tablets at today’s spot rate,how much would you pay in U.S. dollars?If you agree to pay 2-million pesos but wait 180 days and end up payingthe 180-Day forward rate, how much would you be paying for the 100,000tablets, in U.S. Dollars?Your competitors sell the tablet for $41.20 and you must mark you productup from cost by at least 20% to earn a minimal profit, should you buy thetablets today? Explain your answer.Should you wait to buy the tablets in 30 days at the current 30-day forwardrate? Explain your answers.
You own and operate a chain of electronic stores in Texas and you areconsidering expanding your inventory to include tablet work stations forsmall businesses. There is only one supplier of the brand of tablets youwould like to stock in your store, and that firm is located in Mexico. Youhave researched the current spot and forward rates between the U.S. andMexico, as indicated in Table-1TABLE-1U.S. Dollar/Peso<OR>Peso/U.S. Dollar123451.785130-DayForward1.705290-DayForward1.8051180-DayForward1.7555????Spot RateQuestions:Complete the Peso/ U.S. Dollar row in Table-1 and explain yourmethodology.If you agree to pay 2-million pesos for 100,000 tablets at today’s spot rate,how much would you pay in U.S. dollars?If you agree to pay 2-million pesos but wait 180 days and end up payingthe 180-Day forward rate, how much would you be paying for the 100,000tablets, in U.S. Dollars?Your competitors sell the tablet for $41.20 and you must mark you productup from cost by at least 20% to earn a minimal profit, should you buy thetablets today? Explain your answer.Should you wait to buy the tablets in 30 days at the current 30-day forwardrate? Explain your answers.
You own and operate a chain of electronic stores in Texas and you areconsidering expanding your inventory to include tablet work stations forsmall businesses. There is only one supplier of the brand of tablets youwould like to stock in your store, and that firm is located in Mexico. Youhave researched the current spot and forward rates between the U.S. andMexico, as indicated in Table-1TABLE-1U.S. Dollar/Peso<OR>Peso/U.S. Dollar123451.785130-DayForward1.705290-DayForward1.8051180-DayForward1.7555????Spot RateQuestions:Complete the Peso/ U.S. Dollar row in Table-1 and explain yourmethodology.If you agree to pay 2-million pesos for 100,000 tablets at today’s spot rate,how much would you pay in U.S. dollars?If you agree to pay 2-million pesos but wait 180 days and end up payingthe 180-Day forward rate, how much would you be paying for the 100,000tablets, in U.S. Dollars?Your competitors sell the tablet for $41.20 and you must mark you productup from cost by at least 20% to earn a minimal profit, should you buy thetablets today? Explain your answer.Should you wait to buy the tablets in 30 days at the current 30-day forwardrate? Explain your answers.
You own and operate a chain of electronic stores in Texas and you areconsidering expanding your inventory to include tablet work stations forsmall businesses. There is only one supplier of the brand of tablets youwould like to stock in your store, and that firm is located in Mexico. Youhave researched the current spot and forward rates between the U.S. andMexico, as indicated in Table-1TABLE-1U.S. Dollar/Peso<OR>Peso/U.S. Dollar123451.785130-DayForward1.705290-DayForward1.8051180-DayForward1.7555????Spot RateQuestions:Complete the Peso/ U.S. Dollar row in Table-1 and explain yourmethodology.If you agree to pay 2-million pesos for 100,000 tablets at today’s spot rate,how much would you pay in U.S. dollars?If you agree to pay 2-million pesos but wait 180 days and end up payingthe 180-Day forward rate, how much would you be paying for the 100,000tablets, in U.S. Dollars?Your competitors sell the tablet for $41.20 and you must mark you productup from cost by at least 20% to earn a minimal profit, should you buy thetablets today? Explain your answer.Should you wait to buy the tablets in 30 days at the current 30-day forwardrate? Explain your answers.
