Multinational Financial Management DeMagistrisFashion Company, based in New York City, imports leather coats from Acua...
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Finance
Multinational Financial Management
DeMagistrisFashion Company, based in New York City, imports leather coats from Acua Leather Goods, a reliable and longtime supplier, based in Argentina. Payment is in Argentine pesos. Since both DeMagistris and Acua wanted to continue their longtime relationship they agreed on a risk-sharing arrangement. Assume that the exchange rate at the time of the agreement is Ps 65/$ and they agree to share the difference equally between the base rate and the actual spot rate. DeMagistris contracts to import leather coats fromAcua for Ps50,000.
e)At Ps50.00/$, what will be the dollar cost of a leather coat to DeMagistris?
f)At Ps50.00/$, what will Acua Leather Goods receive in pesos per leather coat?
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