Foreign exchange exposure question

Suppose a USA company has a supplier located in Canada who does
work for them. They receive a bill from the Canadian company each month
for about $10,000 USD. Each bill includes a foreign exchange adjustment
of several hundred USD. Does the USA company have foreign exchange
exposure here? Should they be doing something about this? Thanks.
Sara
Reply to
sbernelli
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Where 'here' is the UK, right? If so, I think you aren't telling us something from your homework assignment because as you have told us the facts, the UK has nothing to do with your scenario.
Reply to
Tumbleweed
It's NOT a homework assignment. I've met treasury folks from the USA and from the UK and I find the UK treasury folks to be very sharp. You do know what it means to ASSume, right?
Sara
Reply to
sbernelli
Indeed I do which is why I clearly stated it was an assumption.
So, in what way does the US company have anything to do with the UK?
Reply to
Tumbleweed
In message , snipped-for-privacy@hotmail.com writes
Yes.
Agree a new contract or get the supplier to invoice in Canadian dollars and buy the canadian dollars at a forward rate so that the amount payable in US$ is fixed at the outset.
Reply to
john boyle

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