a U.S. firm, sells merchandise today to a British company for 100,000. The current exchange...
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a U.S. firm, sells merchandise today to a British company for 100,000. The current exchange rate is $2.03/, the account is payable in three months, and the firm chooses to hedge by borrowing 98,765.43 today and exchanging the proceeds today for dollars; the loan will be paid back with the 100,000 accounts receivable (money market hedge). If Husky converted the borrowed pounds into dollars today and invested that amount at its WACC of 8% (2% for 90 days), how much much money in U.S. dollars will Husky Sporting Goods Company have in 90 days?
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