The document outlines a problem involving calculating profits and losses from purchasing and selling shares. It provides details on: purchasing $20,000 worth of shares at Rs 125 per share when the exchange rate was $1=Rs42; planning to sell 75% of shares on Dec 31 at Rs 150 per share when the exchange rate is expected to be $1=Rs45; and the cost of capital is 10% annually. It asks to calculate: the purchase price in rupees, total sales in dollars, net profit/loss in dollars, present value of selling price in rupees using a 10% discount rate, and absolute and present value of profit/loss in dollars.

1. Problems
I had purchased $20,000 worth of shares at Rs 125 per share in Indian market(1$
=Rs42) on 1st January 200X. I plan to sell sell 75% of such number of shares on 31st
December 200X at Rs 150 per share. The expected market value 1$ = Rs45. The cost
of capital(Discounting rate) is 10% per annum.
Calculate the following:
a) What is the purchase price in Indian rupee?
b) What is the total sales in dollar?
c) What is the net profit /loss incurred in dollar?
d) If we use cost of capital 10%, what is the present value of selling price in
Indian Rupee?
e) What is the absolute profit/loss in dollars and present value of profit/loss
in dollars?
Production, purchases and sales budgets.
2. The management of AE Manufacturing Co.Ltd. produce a range of components
and products. They are considering next year’s production, purchases and sales
budgets.