What is the change in the account receivable

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Reference no: EM131883559

1.) An Australian miner sells coal to a Japanese importer for 70,000,000 JPY. The importer will make payment in 30 days. The Australian miner keeps its financial statements in AUD.

It books a sale and records an accounts receivable in AUD. The current exchange rate is 86.95 JPY / AUD. What is the AUD value of the receivable? (6,086,500 AUD).

Suppose that in 30 days the exchange rate has changed to 84.55 JPY / AUD and the importer pays the 70,000,000 JPY. How may AUD does the Australian miner collect? (5,918,500 AUD).

What is the change in the account receivable? (-168,000 AUD)

How much (in percent) did the Australian miner lose as a result of the exchange rate change? (2.76%)

2.) A U.S. Investor wants to invest $5,000 in China at a 6% interest rate. Today the exchange rate is 6.88 CNY/USD.

How many CNY will the investor have in one year? (36,464 CNY)

The investor exchanges CNY for USD at 6.75/USD. How many USD does the investor have? ($5,402.07). What is the investors return? (8.04%)

Which currency appreciated? (BRL - it takes fewer BRL to buy a dollar)

Which currency depreciated? (USD - a USD buys fewer BRL).

How much, in percent, did the USD depreciate? (-3.13%)

3.) The current British Pound to Euro exchange rate is £.86/€. How many Euros does it take to buy one British Pound? (£1.1628)

In one year, the exchange rate becomes £.75/€. Which currency appreciated? (£). Which currency depreciated? (€).

In percent, how much did the appreciating currency rise? (14.67%)

In percent, how much did the depreciating currency fall? (12.79%)

Reference no: EM131883559

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