Waec Model Questions Vol1 2023 Commerce Question 4
Practice essay / theory question 4 from the 2023 Waec Model Questions Vol1 Commerce examination. This question covers Foreign Trade, Exchange Rate Impact, Export Costing .
A Nigerian exporter supplies 10,000 kg of cocoa to a European buyer at a contract price of $2 per kilogram. The prevailing exchange rate at the time of contract signing is ₦460 per US dollar. Three months later, the naira is devalued to ₦520 per US dollar. The export is subject to a 5 % export duty (levied on the naira value of the revenue) and a freight charge equal to 10 % of the contract value in dollars. Using the information above, determine the exporter’s net foreign‑exchange earnings in naira under the original exchange rate and after the devaluation. Also calculate the percentage change in net earnings caused by the devaluation. Finally, discuss two advantages and two disadvantages of a currency devaluation for Nigerian exporters.
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This is Waec Model Questions Vol1 2023 Commerce Question 4. It is one of the essay questions from the 2023 Waec Model Questions Vol1 Commerce examination.
The question covers Foreign Trade, Exchange Rate Impact, Export Costing .
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