Spot and Forward Rates Boisjoly Watch Imports has agreed to purchase 20,000 Swiss watches for 1 million francs at today'

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Spot And Forward Rates Boisjoly Watch Imports Has Agreed To Purchase 20 000 Swiss Watches For 1 Million Francs At Today 1 (94.84 KiB) Viewed 37 times

Spot and Forward Rates Boisjoly Watch Imports has agreed to purchase 20,000 Swiss watches for 1 million francs at today's spot rate. The firm's financial manager, James Desreumaux, has noted the following current spot and forward rates: U.S. Dollar/Swiss Franc Swiss Franc/U.S. Dollar Spot 1.6650 0.6006 30-day forward 1.6510 0.6057 90-day forward 1.6420 0.6090 180-day forward 1.6320 0.6127 On the same day, Desreumaux agrees to purchase 20,000 more watches in 3 months at the same price of 1 million Swiss francs. a. What is the cost of the watches in U.S. dollars, if purchased at today's spot rate? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar. $ b. What is the cost in dollars of the second 20,000 batch if payment is made in 90 days and the spot rate at that time equals today's 90-day forward rate? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar. $ C. If the exchange rate is 0.55 Swiss francs per dollar in 90 days, how much will Desreumaux have to pay (in dollars) for the watches? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar. $