12/ As the director of a US company, assume the exchange rate is 120 JPY...
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12/ As the director of a US company, assume the exchange rate is 120 JPY to 1 USD. Every time you receive an order, instead of shipping if from your production facility, you would go to a Japanese company and receive payment directly.
a/ If the invoice received is 7,500 JPY and you can collect 62 USD per item sold to your customer, what would be your loss per item if you were to pay 7,500 JPY to the Japanese company ?
b/ Why should you conduct a careful analysis of the currency risk here and consider more careful risk management ?
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