Oates Inc. is a U.S. exporter. It sold antique American muscle-cars to a Japanes

Question

Oates Inc. is a U.S. exporter. It sold antique American muscle-cars to a Japanese customer at a price of 143.5 million yen when the exchange rate was 140 yen per dollar. In order to close the sale, Oates agreed to make the bill payable in yen, thus agreeing to take some exchange rate risk for the transaction. The terms were net 6 months. If the yen fell against the dollar such that one dollar would buy 154.4 yen when the invoice was paid, what dollar amount would Oates actually receive after it exchanged yen for U.S. dollars ?

Explanation / Answer

I have performed the calculations in excel and hence cant upload it here, however based on the calculations, Oates would actually receive after exchanging yen for USD is $929,404.

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