Subject category:
Finance, Accounting and Control
Published by:
Darden Business Publishing
Length: 7 pages
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Abstract
Mapec Oil has been given the alternative of paying a lump sum today or four payments over three years. The payments are in Japanese yen. The student must decide which is better in terms of US dollars. Information is provided on forward rates and prices of options. The case is a good introduction to present value concepts and issues related to foreign exchange. Information on forward contracts and options is provided in an appendix.
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Abstract
Mapec Oil has been given the alternative of paying a lump sum today or four payments over three years. The payments are in Japanese yen. The student must decide which is better in terms of US dollars. Information is provided on forward rates and prices of options. The case is a good introduction to present value concepts and issues related to foreign exchange. Information on forward contracts and options is provided in an appendix.