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    08 Activity 1.FM

    Uploaded by

    Aries Christian S Padilla
    The document provides information about foreign exchange rates between various countries and the Philippines. It calculates the peso equivalent price of inventory purchased from different countries. Singapore undervalues the peso the most, with inventory costing P186.90 per unit, while the US, Canada, Singapore, Australia, and China overvalue the peso. The summary concludes that inventory should be purchased from Singapore since it has the lowest price per unit in pesos.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    08 Activity 1.FM

    Uploaded by

    Aries Christian S Padilla
    135 views3 pages
    The document provides information about foreign exchange rates between various countries and the Philippines. It calculates the peso equivalent price of inventory purchased from different countries. Singapore undervalues the peso the most, with inventory costing P186.90 per unit, while the US, Canada, Singapore, Australia, and China overvalue the peso. The summary concludes that inventory should be purchased from Singapore since it has the lowest price per unit in pesos.

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    The document provides information about foreign exchange rates between various countries and the Philippines. It calculates the peso equivalent price of inventory purchased from different countries. Singapore undervalues the peso the most, with inventory costing P186.90 per unit, while the US, Canada, Singapore, Australia, and China overvalue the peso. The summary concludes that inventory should be purchased from Singapore since it has the lowest price per unit in pesos.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    135 views3 pages

    08 Activity 1.FM

    Uploaded by

    Aries Christian S Padilla
    The document provides information about foreign exchange rates between various countries and the Philippines. It calculates the peso equivalent price of inventory purchased from different countries. Singapore undervalues the peso the most, with inventory costing P186.90 per unit, while the US, Canada, Singapore, Australia, and China overvalue the peso. The summary concludes that inventory should be purchased from Singapore since it has the lowest price per unit in pesos.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    BM2004

    NAME: Padilla, Aries Christian S DATE: SCORE:

    I. FOREIGN EXCHANGE RATE (25 points)

    SCENARIO: Suppose that you are the Chief Financial Officer (CFO) of Anma Corporation. Your
    company is planning to buy inventories from a supplier with several locations in various
    countries. Given in the table are the identified country locations of your prospective supplier and
    the related price of the inventory/unit. In your cost analysis, you have identified that all things
    (freight, insurance, etc.) are equal for each country, except the value of its currency.

    Countries of Origin Price of the


    Inventory/
    Unit
    United States $ 5.06
    Japan ¥ 556.80
    United Kingdom £ 4.06
    Hongkong HK$ 40.48
    Switzerland ₣ 4.60
    Canada C$ 5.31
    Singapore S$ 5.21
    Australia AU$ 6.93
    Brunei BN$ 6.88
    China CN¥ 28.23

    You obtained the following peso equivalent in every unit of currency of the above countries.

    Countries of Origin Philippine


    Peso
    Equivalent
    United States $ 1 = P48.192
    Japan ¥ 1 = P0.4610
    United Kingdom £ 1 = P64.2158
    Hongkong HK$ 1 = P6.2169
    Switzerland ₣ 1 = P52.8131
    Canada C$ 1 = P36.8525
    Singapore S$1 = P35.8732
    Australia AU$1 = P35.1079
    Brunei BN$ 1 = P35.7402
    China CN¥ 1 = P7.3184

    You plan to buy 500,000 units of inventories from your chosen supplier. The price of the inventory
    in the Philippines is P249.68 per unit.

    08 Activity 1 *Property of STI


    Page 1 of 2
    BM2004

    Direction: Complete the table below and answer the questions given. Round-off your final answer
    up to two
    (2) decimal places.

    Countries of Origin Philippine Price of the Goods in Philippine


    Peso Peso
    Equivalent (10 items x 1 point)
    United States P48.192 P243.85
    Japan P0.4610 P256.68
    United Kingdom P64.2158 P260.72
    Hongkong P6.2169 P251.66
    Switzerland P52.8131 P280.43
    Canada P36.8525 P195.67
    Singapore P35.8732 P186.90
    Australia P35.1079 P243.30
    Brunei P35.7402 P245.89
    China P7.3184 P206.60

    Questions: (15 points: 3 items x 5 points)


    1. Which of the countries above undervalue the Philippine peso? Justify your answer
    by showing your solution.

    Answer:

    (3) n the table above, Singapore is


    the country that undervalue the
    Philippine peso. As we can
    (4) see in the table, the price of the
    goods is only P186.90.
    COUNTRY AMOUNT OF UNDERVALUATION
    Japan P7.00 (P249.68 – P256.58)
    United Kingdong P11.04 (P249.68 – 260.72)
    Switzerland P30.75 (P249.68 – P280.43)
    Hongkong P1.98 (P249.68 – P251.66)

    2. Which of the countries above overvalue the Philippine peso? Justify your answer
    by showing your solution.

    Answer:
    COUNTRY AMOUNT OF UNDERVALUATION
    United States P15.83 (P249.68 – P243.85)
    08 Activity 1 *Property of STI
    Page 2 of 2
    BM2004
    Canada P54.01 (P249.68 – P195.97)
    Singapore P62.78 (P249.68 – P186.90)
    Australia P6.38 (P249.68 – P186.90)
    Brunei P3.79 (P249.68 – P245.89)
    China P43.08 (P249.68 – P206.60)

    3. In what country should you purchase the inventories? Justify your answer by showing
    your solution.

    Answer:
    Purchasing the inventories from Singapore is most beneficial as the price per unit is only
    P186.90.

    08 Activity 1 *Property of STI


    Page 3 of 2

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