BEO 3517 International Trade Practices Semester 1, 2017 Group Assignment 2 (10% of total subject marks Assignments are to be done in groups of approx. 5 students and the group is to indicate the apportionment of marks to each group member (by indicating marks next to student signatures on the cover sheet). This assignment is in TWO parts You are to use ANZ EEBOK / OZDOCS to complete this assignment (Melbourne students only) Due date: at the beginning of tutorials in week 8 Part One: due at the beginning of tutorials in week 2 On Monday of week2 you are to obtain the following information: • The spot rate for the United States Dollar - USD (you MUST provide hard copy evidence of where this information was obtained) You will have to decide whether you will enter into a forward exchange contract or not. The value of the contract is as per the product you are selling below (listed in Part 2) You are to give your group’s work to your tutor who will sign this and return to you immediately. This is just to confirm what you have decided to do. You will need to submit this document with the assignment when you hand in Part 2. Part Two: Beginning of tutorial in week 6 Your company (Moltobene Pty Ltd) has decided that it will begin exporting to Malaysia. You have heard about the benefits of preferential duty treatment for Australian goods under the MalaysiaAustralia Free Trade Agreement (MAFTA). The products you will export are (prices shown on an EXW Incoterms 2010 basis): a) Australian Motif Desk Pad Deluxe Code AMDD. 50 pads per box. Price AUD 8.95 per pad. Total quantity of pads: 2000. b) Australian Desk Calendars Deluxe. Code ADCD. 100 calendars per box. Price AUD 4.65 per calendar. Total Quantity of calendars: 15000. Sizes and measurements: Product Gross Weight per box Measurement per box A 60 kgs 0. 08 m3 B 15 kg 0.06 m3 You are to complete the necessary documentation to enable the importer to complete border clearance processes in Malaysia and you must also complete a Certificate of Origin (from the exporter’s point of view) for the above products. You also need to decide whether to use air or sea transport, based on the information provided below. The information you are to use for completing the necessary documents is as follows: Seller: Moltobene Pty Ltd, 94 Fetuccine St, Pastaville, Vic 3999 Australia Tel: +613 12345678 Buyer: Sanortep Sdn. Bhd. 378 Bayan Lepas Penang 54160 Malaysia Tel: +60 4 678345129 Roberto Bergami © 2017Terms of Delivery: CIP Penang, uncleared for import, all charges outside for buyer’s account, Incoterms 2010 Method of payment: Direct payment in USD 60 days from invoice date. Invoice and payment will be in USD Transport details: a) Sea transport: Bow Wave voyage 45, Departing Melbourne 14 April 2017, destination Westports, Malaysia Latest receival date: 11 April 2017 Bill of Lading Number 84567 Transit time to Westports: 16 days Cost: Seafreight: USD 925.00; Cartage to wharf: AUD 205.00; Documentation: AUD 275.00 b) Air Transport: Flight MH 148 Melbourne-Kuala Lumpur 10 April 2017, then MH128 Kuala Lumpur-Penang 11 April 2017, AWB 232 – 95838627 Costs: Airfreight: AUD 1455.00; Cartage to airport: AUD 155.00; Documentation: AUD 165.00 Insurance charges (regardless of mode of transport chosen). Premium = (CPT invoice value X 110%) X 0.3% On Monday week 6 you are required to: • Obtain the current spot rate (must be from the same source as the other rates above). At the start of the tutorial in week 8 you will also submit a brief written analysis on the effect of the exchange rates against the amount receivable by you when converted to AUD. You must include part one of the assignment (that is the part that was signed by your tutor) when you submit part two. Your brief report must clearly show the effects of the exchange rate movement and the whether a foreign exchange contract would have been a good exchange risk management tool. You are encouraged to show your calculations – what you submit is what is assessed. The following format may be of assistance to you: You must hand in hard copy evidence of the source of your exchange rate information. You may assume any other information that is not given. This will be accepted provided it is consistent and logical Roberto Bergami © 2017 Week 2 date Week 6 date Spot rate Amount receivable in AUD equivalent